Austral sells Sydney brickworks to private buyer for $41m
Austral Bricks has sold two adjoining brickwork sites in Southern Sydney for $41 million to a private buyer in a sale-and-leaseback deal.
Austral comes under the umbrella of ASX-listed Brickworks, the country’s largest brick manufacturer.
The two sites at 62 Belmore Road and 111 Bonds Road in Riverwood, about 25 kilometres south west of the Sydney CBD, cover over 9 hectares on two titles with Austral committing to a partial leaseback of 13,263 square metres for a 10-year term with a five-year renewal option.
With the brickworks sites bringing in annual rent of $1.6 million, the deal reflects a yield of about 3.9 per cent.
Selling agents Ryan Jennings and Jason Edge negotiated the deal to a private buyer, but said they were unable to disclose their identity.
Mr Edge said the site held potential for redevelopment and asset repositioning and could suit a range of purposes including storage and manufacturing.
“The property is one of the south-west market’s largest infill holdings and, thanks to the size and flexibility of the asset, options for use are many and varied,” he said.
Mr Jennings said owner-occupiers were targeting opportunities in Riverwood ahead of the long-awaited Belmore Road motorway ramps, which will offer direct access to the M5 South West Motorway from next year.
“Overall, we have seen more purchasers seeking to invest in the Riverwood area, where they have previously not been looking,” he said.
Areas like South Sydney have become some of the most industrial land-constrained markets in Sydney due to residential development.
As part of its most recent annual results industrial giant Goodman Group said markets like south Sydney would become home to more multi-storey industrial facilities as is happening in places such as China, Japan, Hong Kong and New Jersey.
Goodman Group chief executive Greg Goodman said south Sydney was likely to be the “first cab off the rank” in Australia as part of this trend.
Brickworks, which supplies bricks, tiles and timber for the construction of about 80,000 homes a year, has been hit by the housing market slowdown and tightening mortgage market.
The $2.6 billion capitalised company reported a 5.8 per cent fall in net profits when it published its full-year results last month, a result which sent its share price tumbling.
“All of a sudden we’ve got this pothole in the demand, which has come from nowhere,” chief executive Lindsay Partridge said.
