Investment firm Gateway Capital has reached a $118.5 million deal to acquire a 1.8-ha industrial property in the northern Sydney suburb of St Leonards from Dexus.

The property at 12 Frederick Street sits between Sydney’s North Shore Hospital precinct, St Leonards train station, and three of Sydney’s major motorways.

The industrial estate currently hosts 12 separate tenants who share 17,471 sqm of gross lettable area (GLA).

The facility comprising 13 office and warehouse spaces ranging in size from 900 sqm to 2050 sqm.

Gateway’s managing property director Peter McDonald mentioned the benefit of purchasing a property in a current unstable real estate climate.

“This is a highly attractive trophy-type asset that rarely becomes available to purchase,” McDonald said.

“The location is second to none being the closest industrial market to the Sydney CBD and within close proximity to major road and rail networks. This asset has all the attributes to capture the upper end of rental growth that is prevalent in our market at present.”

Gateway’s CEO and managing director Stuart Dawes said the asset represented another strong acquisition in the Gateway and Invesco strategy, targeting urban infill markets like St Leonards.

“We expect the assets acquired in the Gateway and Invesco strategy to continue to experience solid income growth driven by the strong occupier demand coupled with Gateway Capital’s active management approach,” Dawes said.

The St Leonards property adds to a growing portfolio in the Gateway/Invesco partnership, as the pair continue their investment ventures along Australia’s expanding east coast real estate.

The major investment comes after Fraser’s Property Industrial’s strategically located purchase of 73 hectares of land in Kemps Creek, NSW in September.

Earlier this year, Westbridge Funds Management similarly sealed a $37.465 million industrial deal on behalf of a newly established investment firm, Welshpool Property Fund.

The warehouse transaction follows a fall in industrial deals nationwide during the third quarter of 2022, down 53% year-on-year to $3.2 billion, according to MSCI Real Assets.

Image: Gateway Capital/LinkedIn