GPT forges further into Melbourne industrial market
Diversified property trust GPT Group is forging deeper into the logistics sector, snapping up three sites in Melbourne’s western industrial heartland as it pours more capital into the area.
The group, which reports its full-year results today, has flagged that it wants to bolster its logistics holdings and is selling a half-stake in Sydney’s landmark MLC Centre for about $800 million to free up capital for the shift.
In its latest move, GPT has picked up two logistics assets and 8.9ha of land in the western Melbourne industrial precincts of Derrimut and Truganina.
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The sites are a 10,700sqm warehouse facility on Mount Derrimut Rd and a nearby 11,000sqm facility on Boundary Rd, Truganina.
Both are fully leased and sit near the Western Ring Rd and have easy access to the Port of Melbourne and CBD.
Combined with the Sunshine Business Estate in western Melbourne that GPT picked up last year, they have a weighted average lease expiry of 7.7 years.
GPT head of office and logistics Matthew Faddy says the company has also secured a site that has the capacity for a 48,000sqm logistics facility once developed.
GPT head of office and logistics Matthew Faddy
“These acquisitions have increased GPT’s exposure to a part of Melbourne which has seen very strong levels of tenant demand and is expected to significantly benefit from major road infrastructure investment,” Faddy says.
“We expect strong demand for quality logistics facilities in western Melbourne to continue with strong population growth and gentrification of traditional industrial precincts such as Port Melbourne and Fishermans Bend.”
The facility in Derrimut was completed in 2011 and the Truganina facility in 2014. The acquisition of the 8.9ha site in Truganina comes as GPT announced it has fully leased its new 30,100sqm warehouse facility at 50 Old Wallgrove Rd, Eastern Creek, in Sydney.
Since mid-2017, GPT has completed six logistics developments, adding $240 million to its investment portfolio. GPT, led by Bob Johnston, is tipped to turn in healthy results with CLSA analysts last month upgrading the stock to an outperform.
They cited high earnings certainty and estimated at least 4% funds from operations growth in fiscal 2019, which will come despite gearing falling to about 23% after the MLC Tower stake.
“With low gearing, quality and earnings certainty with a 4.8% dividend yield, GPT should outperform,” CLSA says.
This article originally appeared on www.theaustralian.com.au/property.
