Perth's house prices have fallen dramatically in the past decade. Photo: Stefan Gosatti

Sydney's GDI Property Group increases Perth presence

Ingrid Fuary-Wagner|Nov 18, 2019

Sydney-based fund manager GDI Property Group is upping the ante on its Perth investments with a call option to purchase a $98 million portfolio of 17 properties across the west coast city’s metropolitan area.

The portfolio is fully-leased to high-profile car dealerships and services centres on arterial roads.

The properties have a weighted average lease expiry of 11 years, with the tenant having five lots of five-year options. Savills’ Chas Moore brokered the deal off-market after seeking offers for the Divirgilio family.

The ASX-listed group will buy the portfolio through a newly created unlisted trust, which is forecast to have an initial distribution yield of 7.75 per cent per annum.

A capital raising of about $76 million is expected to take place this week. Settlement is anticipated for early January.

“With high underlying land value underpinning the Portfolio’s value, CPI + 1 per cent rental increases, a long WALE and market leading car dealerships housing names such as Toyota, Volkswagen, Nissan, Hyundai and Kia, GDI is very pleased to be in a position to acquire the Portfolio,” Steve Gillard, managing director of GDI, said.

“We believe the new fund that will acquire the portfolio will be highly sought after by our high net worth and sophisticated investors and we look forward to launching the offering next week.”

GDI already has a strong Perth presence, with its portfolio strategically weighted towards the city.

GDI’s wholly-owned portfolio owns both Westralia Square and Mill Green while one of its funds, GDI No. 43 Property Trust, owns Perth’s only IKEA store.

The group is also set to acquire an office building at 180 Hay Street with plans to refurbish the 5000 sq m asset.

“With no forecast new supply until 2023, limited available prime grade contiguous floors and a steady improvement in demand, we believe that currently the Perth CBD offers better returns over the medium term than any other major office market in Australia,” the group said in its latest annual report.