Pittwater Industrial has bought a new logistics facility in Prestons, Sydney from Loftex Property for $58.255 million, reflecting a capitalisation rate of 3.35%.
The institutional-grade property at 5 Yarrawa Street comprised 15,066 sqm of space on a 2.72-hectare site in Prestons, situated about 37 kilometres southwest of the Sydney CBD.
Located within a heavily land constrained market, the property offered immediate access to major arterial roads and key infrastructure such as the M7 and M5 motorways.
The asset was pre-committed to Australia’s largest privately-owned freight logistics operator, ACFS Port Logistics, on a 7-year weighted average lease expiry (WALE) from practical completion, generating an annual income of $1,953,640 per annum.
The property was sold via an on-market expressions of interest campaign and generated significant interest from the institutional market.
The JLL Capital Markets Industrial & Logistics team acted exclusively for the seller.
Recent Sydney industrial property deals include Leda Holdings’s sale of a 7.71-hectare industrial infill site in Milperra in Sydney’s west that was earmarked for a new multi-storey logistics redevelopment earlier this month.
Prior to that, Logos, KKR and Mubadala Investment bought industrial development sites in Sydney and Melbourne with a combined end value of $640 million last month.
In January, Centuria Industrial REIT purchased a portfolio of six urban industrial assets located across Melbourne, Sydney and Brisbane worth a combined end-value of $132.4 million.
Other deals include Stockland’s acquisition of two logistics sites in Sydney’s southwest for $128.5 million and LBP Developments’ sale of a prime industrial development site in Revesby to a private developer for $16.3 million.
Warehouse tenants have been quick to lock down industrial space, resulting in a 12% quarter-on-quarter contraction for existing vacant space on the east coast during Q4 2021.
According to recent Knight Frank research, there was about 1.2 million sqm of industrial stock leased in Sydney in 2021, surpassing the previous two years.
As vacancy declined to record lows across the city, prime rents rose 2.3% in Q4 and new development increased to a new high of 750,000 sqm in 2022.