Listing of $520m logistics portfolio to tap renewed market interest

The parties declined to comment on the likely value of the assets, which industry sources valued at more than $520 million, but Arrow Capital Partners managing partner Martyn McCarthy said it was a portfolio with assets across Australia’s strong industrial markets.

“The result is a high-quality, scalable portfolio that can serve as a strategic addition to an existing platform, or a foundation for a new entrant to build upon,” he said. “Strong economic and population growth, along with increasing ecommerce penetration, will drive strong tenant demand over the medium to long term.”

Australia Post, Toll Transport and transport company Northline are among tenants in the portfolio of properties – with a weighted average lease expiry of 3.55 years – in Heathwood (two sites) and Bundamba in Queensland, as well as Mount Kuring-gai and Wetherill Park in NSW.

The Bundamba site in the Ipswich region is being marketed as two separate assets. One part of the block features a warehouse leased to Northline and at the back are about 32,000 square metres of land that can be subdivided and have approval for a new warehouse to be built.

Property records show the partners purchased the Mount Kuring-Gai property in May last year for $101.8 million. In 2021, they acquired the two properties in Heathwood, in Brisbane’s outer south-west, for a combined $101.6 million and the Bundamba site for $26.4 million.

They paid $45.5 million for the logistics site in Wetherill Park, in western Sydney, in 2022.

The decision to list the portfolio now showed a return in investor confidence in the industrial sector, said Ben Martin-Henry, data provider MSCI’s head of private assets research for the Pacific region.

The industrial market had been the “darling” of the property sector for the past six to seven years, but also hadn’t been immune to global financial issues, Martin-Henry said.

“We did see a little bit of a slowdown [in the past few years], but I think we’ve pretty much recouped all of those losses,” he told The Australian Financial Review on Friday.

“[We’ve seen] around a 3 per cent increase in value over the last three quarters… investors are seeing then a turnaround of that industrial space.”

Collier’s Gavin Bishop and Sean Thomson as well as JLL’s Ben Hegerty, Joel Scully, Luke Produka and Mike Pyke are managing the sales campaign, which closes on October 9.

Hegerty said Australia’s industrial market fundamentals remained incredibly strong, underpinned by population growth, infrastructure investment and rising e-commerce penetration.

“With demand forecast to exceed 6.5 million square metres of additional logistics space over the next five years, The Pinnacle Portfolio offers investors a strategic foothold in a sector poised for sustained outperformance,” he said.

Sydney and Brisbane’s industrial markets have a 3.9 per cent vacancy rate, according to Colliers data.

Bishop said the Pinnacle Portfolio was a unique offering with institutional-grade assets located in core logistics precincts.

“Opportunities of this scale and quality are exceptionally rare, particularly in markets as tightly held as Sydney and Brisbane,” he said.

“Both markets continue to command benchmark pricing and liquidity, underpinned by the weight of global institutional capital seeking long-term exposure to Australia’s industrial sector. This is a chance to secure a platform that delivers both strong cash flow and long-term upside.”