$6m growth purchase
A syndicate of southern investors has found fertile ground for a property play in Townsville, acquiring a large industrial warehouse complex used for the distribution of fertilisers.
Formed under Sydneybased buyers agent Unikorn Commercial Property, the syndicate bought the 2ha property in the Bohle’s Industrial Ave for $6.68m through Knight Frank Townsville.
The “growth asset” is leased to Ameropa Australia’s wholesale arm, Impact Fertilisers.
But the purchase entailed some risk with the current lease due to expire next year, albeit with an option for a fiveyear extension.
Unikorn founder Helen Tarrant said the investors had taken a calculated risk.
Even so, she said Townsville had the population base and demand to support industrial assets.
If the tenant chose not to stay, there was potential to repurpose the assets, she said.
“I have a really positive outlook for Townsville. I think it is going to be a town that continues to perform well,” Ms Tarrant said.
“Our investors are looking for something out of the ordinary. This gives them industrial at 9 per cent (return). They took a little bit of risk and cashflow,” Ms Tarrant said.
Knight Frank’s Paul Dury and Dan Place offered the property in an expressions of interest campaign last year with the parties settling on the deal last month.
Mr Dury, Knight Frank’s Head of Agency, Townsville and Mackay, said the nature of the property improvements, tenant covenant and current competitive tension for secure income streams led to more than 145 parties inquiring for the property and seven offers to purchase being submitted.
“With regards to yields, we are seeing them soften slightly, but coupled with little new stock being constructed and extremely low vacancy rates, income growth in the industrial sector will continue to support values well into the foreseeable future,” Mr Dury said.
Impact Fertilisers has occupied the site since 2007.
Ameropa Australia, part of the Swiss-based global agribusiness, acquired Impact Fertilisers in 2010.
The Townsville site is one of several Ameropa distribution centres in Australia and sits on 2ha of industrial land with some 8880sq m of warehousing in two buildings.
It includes 5830sq m warehouse developed in the 1990s and a 3050sq m warehouse built around 2006.
The distribution centre plays a key role for the region’s agriculture sector with products including urea, phosphates and superphosphates and potash.