GARDA Diversified Property Fund chases strong returns in Mackay with a $29.5 million purchase of distribution centre

AN ASX-listed real estate investment trust has broken into the tightly held investment grade industrial market in central Queensland, handing over $29.5 million fort his site.

STRONG YIELD: GARDA Diversified Property Fund paid $29.5 million a state-of-the-art distribution asset at 69-79 Diesel Drive, in Mackay.

AN ASX-listed real estate investment trust has broken into the tightly held investment grade industrial market in central Queensland.

GARDA Diversified Property Fund (GDF) paid $29.5 million for a state-of-the-art distribution asset at 69-79 Diesel Drive, Paget, about 8km from Mackay CBD.

The sale of the property, which is leased to Wesfarmers subsidiary Blackwoods until 2029, with options to 2039, realised a yield of 7.7 per cent.

Colliers International state chief executive Simon Beirne, who negotiated the deal and marketed the property in conjunction with Burgess Rawson, said it generated significant interest with investors turning their attention to regional areas due to the lack of supply in capital cities.

“REITS, syndicators and private investors from around Australia were looking at the property due to its long term lease to Wesfarmers, and the net income of $2,234,409 per annum plus GST along with substantial depreciation allowances,” he said.

The 13,843sqm facility is on a 3.01ha site near the airport and the intermodal terminal,

It was previously owned by a Charter Hall managed fund.

Mr Beirne said similar asset were tightly held even in regional locations.

“There is no doubt that it is currently a vendor’s market with high quality assets with long-term leases receiving significant inquiry volumes,” he said.

“This has resulted in competition causing yields to compress substantially as investors put a premium on the long term, secure cash flows provided by these annuity-type assets.”

GARDA Capital Group’s managing director Matthew Madsen said: “This acquisition by GDF demonstrates the ability of the GARDA Capital Group to prudently increase assets under management through this high quality long dated leased asset, which in turn will provide both strong operational revenues and investment returns.”

Blackwoods was founded in 1878 and is now Australia’s dominant business to business supplier of industrial, engineering and workplace safety needs with 63 outlets nationwide. business supplier of industrial, engineering and workplace safety needs.