Sydney’s industrial land boom has delivered a windfall profit for Financial Review Rich Lister Bob Ell family’s Leda Holdings, which has tripled its money in four years with the sale of an industrial site in south-west Sydney.
Leda Holdings bought the 7.7-hectare holding in Milperra for $52 million in 2018 – well before COVID-19 ignited both e-commerce demand and sector pricing – and has just sold it to industrial property giant ESR for $152 million.
The sale is another dramatic demonstration of how valuable industrial land has become since 2020, particularly in the past 12 months.
Western Sydney land industrial prices rose about 50 per cent through 2021, while parts of Melbourne increased even more, new figures show. Rates in other Australian cities are also increasing.
The purchase by Singaporean wealth fund GIC and ESR of the Milestone Logistics portfolio from Blackstone last April for $3.8 billion on a yield of about 4.5 per cent, set a new benchmark in pricing.
ESR plans to redevelop the site, which houses older-style industrial buildings and is returning about $4.25 million in annual rent, it into a multilevel logistics facility.
Mr Ell said his company was still bullish on industrial property and planned to keep investing in the sector.
“Leda is looking to continue our long-proven strategy in targeting large-scale infill sites for development or repositioning,” Mr Ell said.
Its recent acquisitions include the purchase last year of a 4.7-hectare property in North Rocks, Sydney, for $57 million on an annual yield of 4.2 per cent.
The Milperra property was sold in an off-market campaign by Gavin Bishop, Trent Gallagher and Sean Thomson from Colliers.
Mr Bishop said Milperra was “classified as a real core infill market with good access to the M5 motorway, the Moorebank Intermodal Terminal and is very close to South Sydney” – the source of much tenant demand.
“With the diminishing supply of land in South Sydney, tenants are being pushed out and markets like Milperra are attracting interest – it’s cheaper in outgoings, cheaper in rent, and you’re not that far from the ports.”
Leda Holdings was founded by billionaire Mr Ell in 1976 and has been trading Sydney industrial property since the 1980s.
