DCP’s Ed Bull moves to leverage industrial market high.
Queensland-headquartered Direct Commercial Property (DCP) has sold a portfolio of five industrial and logistics facilities for a combined total of $61,636,000 to ESR.
Three of the five properties are based in Hemmant, with the other two in Wacol and Eagle Farm, all strategic industrial TradeCoast and western corridor precincts. Property details include:
26 to 30 Wyuna Court in Hemmant, home to tenant Austral Masonry, sold for $11,970,000 representing an initial yield of 5.94 per cent.
739 Progress Road in Wacol, home to tenant Allnex Resins, sold for $7,201,000 representing an initial yield of 5.57 per cent.
112 Harvey Street in Eagle Farm, home to tenant Victaulic Australia sold for $9,595,000 representing an initial yield of 4.93 per cent.
28 Akuna Court in Hemmant, home to tenant Multi Tenanted sold for $25,697,500 representing an initial yield of 5.53 per cent.
58 Anton Road in Hemmant, home to tenant Cruise Craft Boats sold for $7,172,500 representing an initial yield of 4.4 per cent.
Two of the properties in the portfolio were purchased by DCP recently - 28 Akuna Court and the associated wet leases in the industrial hub of Hemmant, north east of the city for $19,750,000 in April 2021, and 58 Anton Road also in Hemmant and home to Cruise Craft Boats for $6,195,000 in August 2021.
DCP Managing Director Ed Bull said all the properties sold were originally purchased as single asset trusts over several years, with the view to add value by active management and re-positioning.
“These five properties were purchased with a view to hold for five to seven years, depending on market conditions. However, we identified that the Australian industrial market had hit a peak in late 2021, and moved early this year to seek a portfolio buyer,” he said.
“The deal was struck in March this year and was unconditional in June, before the significant interest rises began.”
“We have seen the industrial investment market slow significantly since completion of this deal, and expect the pricing metrics to reset over the coming 12-18 months.”
He said DCP investors across the five assets would benefit from an average internal rate of return (IRR) of 20% for extremely low risk investments.
“We have an additional three regional assets currently under contract to be sold. Following these sales, DCP will hold five assets that have additional upside and strategic value, in addition to the two significant private equity investments in Rino Recycling in Brisbane and in Toowoomba-based Mort & Co.”
CBRE’s Jack Pershouse, who negotiated the deals, aid the transaction represented the strong demand for value-add, industrial grade product in Brisbane’s core logistics markets.
“The assets incorporated within the portfolio offer stabilised income, paired with low site cover fundamentals, allowing access for future development within a one to five year window,” he said.
Queensland-headquartered Direct Commercial Property (DCP) is a a private property syndication and private equity business with a focus on low risk returns for investors. Under the direction of founder Ed Bull, DCP has completed 24 property syndicates and private equity transactions, in excess of $294,000,000.