Goodman offloads Sydney infill portfolio for $87m

The sale shows that the industrial market in Sydney is firing with an active market for infill sites.

Goodman Group’s Greg Goodman. Picture: John Feder

Industrial property powerhouse the Goodman Group has sold off a portfolio of infill industrial properties across Sydney to boutique investment manager Box Capital and Gaw Capital for $87m.

The pair snapped up three properties in the industrial hotspots of Wetherill Park, Lane Cove and Arndell Park and plan to overhaul them.

The trio of properties comprise 36,838sq m of land and 22,106sq m of buildings and drew multiple bids from domestic and offshore institutional core-plus and value-add investors.

Colliers agents Trent Gallagher and Michael Crombie and CBRE’s Shaun Timbrell and Jason Edge handled the sale, which they said showcased the strength of the Sydney market.

“All three assets had short weighted average lease expiries, allowing for immediate rental reversion which is where the majority of domestic and offshore capital is looking to deploy,” Mr Gallagher said.

Mr Timbrell said the three assets were examples of what buyers were seeking: short-term leases with the ability to capture market rents in the short term, or repositioning potential to create value.

Box Capital principal Matt Woodman said the strong fundamentals of Sydney would continue to be further supported by population growth, significant infrastructure projects and constrained supply of industrial space in infill markets.

Gaw Capital managing director and principal of investments, Joseph Chan, said the assets’ unique specifications and value-add potential aligned with a commitment to build a best-in-class urban infill logistics portfolio.

“We look forward to further scaling the strategy in 2025,” Mr Chan said.

The portfolio consists of modern and functional warehouse accommodation, including associated office spaces with the ability to re-lease the improvements in their current configurations. It comes with a short weighted average lease expiry by income of half a year, offering immediate access for rental reversion upside.

Vacancy rates in the Wetherill Park, Lane Cove and Arndell Park areas are very low, with significant rental growth forecast in both the west and north Sydney industrial markets driven by these rates.