KordaMentha doubles money on cold storage warehouse sale
KordaMentha’s property funds arm has doubled its money on a cold storage warehouse investment in Melbourne in just two years, after selling the industrial property to Singapore real estate giant Mapletree for $42.8 million.
KM Property Funds, which specialises in securing investments for self-managed super funds, paid $21 million in August 2019 for the near 15,000 square metre warehouse complex at 5-17 Leslie Road and 6-10 Pipe Road in Laverton North in the city’s inner west.
Highlighting the dramatic rise in industrial property values since the start of the pandemic, the Laverton North property was valued at $43 million by Knight Frank in June this year, up $20 million on a June 2020 independent valuation of $23 million obtained by KM Property.
The fund manager acquired the cold storage facility on a yield of 8.5 per cent with a 15-year leaseback to red meat exporter Austco Polar Cold Storage, a subsidiary of ASX-listed agricultural products company Wingara Ag.
Mapletree acquired the property on a yield of 4.3 per cent with 13 years remaining on the current lease.
Explaining its rationale for the acquisition, Mapletree said the strong growth in the e-commerce, food and grocery sectors in 2020 had supported “robust demand for cold storage facilities”.
“Despite the sector’s recent growth, Australia has a relatively low supply of cold storage facilities as compared to other developed markets.
“According to a Global Cold Chain Alliance report, Australia’s per capita cold storage stock in 2020 lags 3 to 4 times behind developed countries like the US, UK and Canada.
“Consequently, there are no vacant cold storage warehouses (less than 5,000 square metres) across the country,” Mapletree said, citing a Colliers research report published in March.
Spanning a total net lettable area of about 14,747 square metres, the Laverton North property comprises five blocks of cold and freezer warehouse (77 per cent of net lettable area), as well as an ambient temperature warehouse, an office and other amenities.
The deal will lift Mapletree’s Australian portfolio to 13 assets worth $870 million. Globally, its portfolio will span 165 logistics assets valued at $10.8 billion.
Explaining the reasons for putting the Austco Polar facility up for sale in April, KM Property Funds chairman James Walsh told investors that activity in the industrial property sector had ”increased and strengthened significantly” since KM Property Funds bought it two years prior.
The property was marketed by JLL and Dawkins Occhiuto.
Its sale comes amid an overseas takeover of Australia’s cold storage sector by the likes of Lineage Logistics, Americold and NewCold.
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