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Private Capital fuels growth in Industrial market with record activity in 2024

Jess Freeman • 21/08/2024
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Private capital investors are making their presence felt in the Logistics & Industrial (L&I) investment market, accounting for 53% of transaction value so far in 2024, a significant rise from the long-term average of 15%. This follows more than $1 billion in national acquisitions by private capital in 2023, signaling a major shift in market dynamics.

Traditionally dominated by institutional groups, the demand for larger L&I assets is now increasingly driven by private investors, including domestic and offshore family offices. Globally, private capital has accounted for 30% of buyers by value in transactions exceeding $30 million over the past three years, a trend that reflects its growing potential within the Australian market.

Amidst this rise, a generational wealth opportunity has emerged with the 100% freehold interest sale of 9-15 Foundation Road, Truganina, VIC. This prime asset, offering secure income and a strong growth outlook, is centrally located in Melbourne’s leading warehousing and distribution precinct and one of Australia’s fastest growing population corridors.
 

The property, being marketed by Cushman & Wakefield’s Chris Jones and Charlie Holmes, is expected to attract significant interest. With a guide price just above land value, estimated at $27 million, the sale represents exceptional value relative to the property’s replacement cost which is in excess of $45 million.

Located within the Dexus Industrial Estate, just off Boundary Road, the asset features 6,611sqm of modern improvements on a 3.15-hectare landholding. The facility has low site coverage, allowing for the potential expansion of a further 10,900sqm Gross Lettable Area (GLA), which could generate significant future income growth and value uplift. As an irreplaceable, prime-quality asset in a core location, it offers long-term potential for both income and capital appreciation.

The property is securely leased to Loscam, Asia Pacific’s market-leading pallet pooling business, with 9.6 years remaining on the lease as at December 2024. The secure income stream and strong forecast rental profile presents a rare opportunity for investors to capitalise on future market growth.

Chris Jones of Cushman & Wakefield said “The demand for prime assets like this, especially in key population growth corridors such as Melbourne’s West, is incredibly strong. The property’s combination of secure long-term income, with 4.0% average annual increases, and genuine expansion capability makes it a standout opportunity in today’s market.”

Charlie Holmes of Cushman & Wakefield said “The current income of $1,270,159 per annum, equating to $40 per square metre of site area, is considered significantly below market levels. This affords an incoming purchaser substantial long-term income upside and capital growth potential.”


International Expressions of Interest for 9-15 Foundation Road, Truganina, VIC, close at 3pm (AEST) on Wednesday, September 18, 2024.


About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2024, the firm reported revenue of $9.4 billion across its core service lines of Services, Leasing, Capital markets, and Valuation and other. Built around the belief that Better never settles, the firm receives numerous industry and business accolades for its award-winning culture.  For additional information, visit www.cushmanwakefield.com.

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