MaxCap cashes in with $90m industrial site flip to Brookfield
The Villawood site, which the MaxCap fund has flipped to Brookfield.

MaxCap cashes in with $90m industrial site flip to Brookfield

MaxCap and developer Time & Place have capitalised on a strong uplift in industrial land values on the east coast over the past 18 months after “opportunistically” selling an industrial site in Sydney’s west to Brookfield for more than $90 million.

The sale represented a 26 per cent gross capital gain on the $71.5 million the MaxCap Industrial Opportunity Fund paid explosives giant Orica for the 12.45ha remediated site at 2 Christina Road in July last year.

The joint venture partners had planned to develop the site into a $150 million last mile logistics estate (since upgraded to $350 million of end value), but instead saw better value and a higher return for investors by selling it to global asset manager Brookfield, after obtaining a permit allowing 70,000 sq m of built-form facilities.

Simon Hulett, head of direct investment at MaxCap Group, said the fund manager had received a number of unsolicited offers from institutional investors as the DA had progressed and had decided to capitalise on them.

“We’ve seen with this site sale and another property we sold in Brooklyn [in Melbourne’s inner west] that industrial land values have gone through the roof,” Mr Hulett said.

“Demand for well-located land parcels to deliver institutional-grade development has pushed land prices up.”

Mr Hulett said the close-ended fund, which is backed by high net worth investors and family offices, was on track to deliver total returns of over 20 per cent.

With the deal due to be wound up at the end of next year or 2024 at the latest, the fund holds two remaining assets, a 16.7 hectare site in Truganina in Melbourne’s west, where it is executing a land subdivision plan in a fund through deal with Stockland and a former Mobil petrochemical storage and handling facility in Spotswood in Melbourne’s inner west that the fund is seeking to subdivide and sell off.

While neither MaxCap nor Brookfield would disclose the purchase price for the Villawood site, transfer documents reveal a subsidiary of Brookfield Asset Management, one of the world’s biggest alternative asset managers, paid $90.09 million for the property.

“We are pleased to have acquired our first Sydney logistics asset in the important central western Sydney hub of Villawood, providing an optimal middle and last mile logistics offering to ecommerce retailers looking to service their customers,” said Brookfield head of real estate investments, Ruban Kaneshamoorthy.

Jason Edge, a senior director in CBRE’s industrial capital markets team, helped broker the Villawood sale on behalf of MaxCap and Time & Place.

“Land values in industrial precincts such as Villawood continue to experience strong growth, with values having increased by 39 per cent across Sydney in 2022,” Mr Edge said.

“With vacancy rates unlikely to increase over the coming years from historic lows, infill locations will continue to be a focus for domestic and offshore capital.”