A Westbridge fund has settled on its purchase of a recently upgraded warehouse, leased to Blackwoods, in Perth from Perron Group for $16.21 million. 

The property, located at 41-43 Baile Road, sits on a 23,177 sqm site in Canning Vale – one of Perth’s most established industrial precincts.  

The building is fully leased to Blackwoods, which is a Wesfarmers subsidiary and Australia’s largest supplier of industrial and safety supplies. 

The site is located 19km south of the Perth CBD, 18km east of Fremantle Port and 15km west of the Kewdale Intermodal Freight Terminal. 

The deal is the second acquisition for Westbridge Diversified Fund No. 4, following its recent industrial deal in the Melbourne suburb of Broadmeadows. 

The Broadmeadows acquisition featured two industrial distribution facilities leased to Holman Industries on a 1.43-hectare site. 

“The recent settlement of the Canning Vale property, adding to the Fund’s first asset in Broadmeadows, is in line with the Fund’s goal of building a $100-150 million portfolio featuring up to 12 high-quality commercial properties diversified by state, asset class and number of tenants,” Westbridge Funds Management Chairman Damian Collins said. 

“We are aiming to build a portfolio of assets diversified across commercial sectors including industrial, medical, large format retail and more.  

“With two strong tenants in Holman and Blackwoods already secured, our goal is to continue to build strong lease covenants by targeting quality national, international, and publicly listed tenants.” 

Last month, Westbridge completed its purchase of an industrial asset in Welshpool, Perth for $37.465 million on behalf of the new Welshpool Property Fund. 

Tom Iredell of Knight Frank, who negotiated the deal, said there was strong demand for the industrial facility from buyers, with in excess of 10 bidders in the first round of the request for offers campaign.

He said it was sold on a yield of 5.03%, which will increase to 5.23% with the February rent review and a short WALE of 4.28 years with the sale price exceeding expectations.

“The Western Australian industrial investment market is seeing historic yield compression on the back of low-interest rates, the emergence of e-commerce, a well-performing mining industry and growing interstate investor appetite,” Iredell said.

‘The yield gap between Western Australia and the eastern states is causing increased Institutional investment interest in Western Australian properties and secondary grade assets, driving yields lower for older style, sub $20 million properties such as this facility at Baile Road.”

Recent Perth industrial deals include a Charter Hall fund buying the industrial property at 22 and 72 Hyne Road in South Guildford for about $50.8 million, and Centuria Industrial REIT’s acquisition of the 48 Kewdale Road, Welshpool property for about $35.1 million.