Clothing business Ramo has purchased an industrial property in Milperra, Sydney in a deal worth $27 million, achieving a 3.47% yield.
The property, located at 36-48 Ashford Avenue, comprised two buildings on an 11,200 sqm site in Milperra – about 24 kilometres southwest of the Sydney CBD.
The asset was occupied by 32 Hundred Lighting, Idiom Furniture and G4M Meticulous with a 1.46-year weighted average lease expiry (WALE) across the site.
The Milperra property also offered IN1 General Industrial zoning, modern office accommodation and warehouse clearance of up to 10.8 metres.
Colliers’ Trent Gallagher and Hamish Miles, as well as LJ Hooker Commercial’s Jon Orsborn, sold the property.
Miles said the south Sydney buyer was looking to relocate their business to a bigger, more affordable facility.
Gallagher said the deal continued to demonstrate the strength of the industrial market within the inner southwest and the ongoing trend of south Sydney occupiers migrating down the M5 motorway.
“The buyers jumped on the property as they saw merit in Milperra as a growth suburb on the back of the developments in the immediate area by PWD, ESR and other large corporates,” Orsborn said.
According to Colliers, there has been an extreme lack of stock in the southwest Sydney industrial property market, which has forced warehouse tenants to pre-empt their moves one to three years in advance.
Lease renewals within the market were tracking at around 65% previously, however they had now jumped up to 90% on the back of both supply issues and unprecedented demand.
The inner southwest industrial market – Padstow, Milperra and Revesby – has undergone significant growth since last December, with multiple off-market transactions to institutional capital totalling more than $600 million worth of property.
Recent Sydney industrial deals include Hines’ acquisition of four logistics properties spanning 58,350 sqm in Sydney and Brisbane from Pipeclay Lawson for $211.5 million last month.
The acquisitions included three large land sites in western Sydney, located at 68 Anzac Street, Chullora, 13 Ferndell Street, South Granville and 128 Russell Street, Emu Plains.
Last month, Coombes Property Group bought an industrial landholding in Botany for $25.25 million, while Pittwater Industrial purchased a new logistics facility in Prestons for $58.255 million, representing a capitalisation rate of 3.35%.
Prior to that, Leda Holdings sold a 7.71-hectare industrial infill site in Milperra in Sydney’s west that was earmarked for a new multi-level logistics redevelopment.
In February, Logos, KKR and Mubadala Investment bought industrial development sites in Sydney and Melbourne, while Centuria Industrial REIT purchased a portfolio of six urban industrial assets located across Melbourne, Sydney and Brisbane in January.
