The heat in the industrial property market has abated from boom times but top players are still getting deals done. In one of the latest plays, Sydney-based Gateway Capital has teamed with Canadian heavyweight Ontario Teachers’ Pension Plan and an Asian sovereign wealth fund to snap up a major site in Chullora, in the city’s west.
The group has emerged as urban infill logistics specialist and is capitalising on its ability to move quickly in its competitive niche, where it comes up against the likes of private equity heavyweight Blackstone and a host of smaller rivals. Active players include Goldman Sachs Alternatives, HMC Capital, and Urban Logistics Co.
But Gateway, led by ex-Propertylink heads Stuart Dawes and Peter McDonald, has been capitalising on the support of its heavyweight backers. They have quietly bought the complex at 2-34 Davidson St via the Gateway Capital Urban Logistics Partnership vehicle for more than $110m. The agents were Jason Edge and Chris O’Brien from CBRE.
The deal delivers vendor Fife Capital an uplift, but Gateway sees plenty of room to bolster the facility, with its deep-pocketed backers in tow.
The complex in Chullora was upgraded to about 25,846 sqm by Fife and houses Shriro Australia and Two Providores. The area sports good access to Sydney airport and is a winner from the city’s road upgrades.
The GULP vehicle, set up in April last year with cornerstone backing from Ontario Teachers’, alongside the Asian fund’s more recent commitment, gives Gateway the firepower to chase more deals, to add to its $520m-plus east coast holdings.
GULP’s focus on inner-urban core-plus and value-add assets. There areas are beating the slowdown on the back of strong tenant demand, driven by rising e-commerce penetration.
Gateway’s Mr McDonald pointed to the shift in market dynamics, with investors increasingly picky about asset quality and positions. He sees Chullora at “the centre of the dartboard” of the Sydney urban infill logistics market.
“It’s an area we have conviction around, and there is currently much higher tenant demand in the infill markets compared to big box warehousing on the outskirts,” he said.
Gateway’s Mr Dawes indicated that more deals were to come for the $1bn operation, saying the broader capital base “increases our dry powder”.
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