Sydney shows industrial strength as asset trades set benchmarks

Warehouses remain in favour for as investors as occupiers scramble for space.

Artists impression of 42-52 Raymond Avenue.

Sydney’s industrial market is firing, with personal transport and payment group A2B Australia unloading almost $100m worth of properties in ­Alexandria and a multistorey warehouse about to hit the block for more than $150m.

In one of the latest plays, A2B sold 9-13 O’Riordan St in Alexandria for $78m, adding to its sale of a Bourke Rd property in the suburb for $19m in December.

A2B said the sales were part of its transformation strategy and could indicate that more companies will look to offload surplus properties as they deal with challenging conditions.

The net proceeds, after debt is repaid, are expected to be about $73m and the company will return this to shareholders as a fully franked dividend by the end of 2023.

A2B executive chairman Mark Bayliss said an external strategic review found owning or remaining in the current sites in the long term was not the right solution for the business.

He said A2B had sold both its Sydney properties, “optimising shareholder value and facilitating an attr­active cash return to shareholders”.

The properties were sold by Colliers’ Michael Crombie and Trent Gallagher.

A2B sold the O’Riordan St asset to Double Space, a Sydney real estate developer which is a joint venture between Enice Technology and Bestplace Corporate. It owns sites around Alexandria, including two large-scale residential development projects.

A2B has also entered into a three-year leaseback over the O’Riordan St premises to enable the company to properly consider its longer-term property requirements.

A2B last year sold its Bourke Rd property to Singapore-based StorHub for $19m. The pan-Asian self-storage property investor and developer, backed by global private equity group Warburg Pincus, already operates in seven Asian countries.

Now, US group LaSalle Investment Management has put one of the country’s first major multistorey industrial assets on the block, with the South Sydney property expected to go for more than $150m.

The funds house is selling the under-construction 19,757sq m, two-storey warehouse at 42-52 Raymond Ave in Matraville via Colliers agents Gavin Bishop, Mr Crombie, and Sean Thomson.

There is the potential for more than 450,000sq m of multi-level warehouse space to be delivered across Sydney in the next three years, and the sale is a key test of the market.

Singaporean investment giant Ma­ple­tree has paid $125.7m for a warehouse in the Sydney suburb of Ingle­burn on a yield of about 4.6 per cent.

The industrial property market is still attractive due to the shortage of warehouses amid strong demand for space driven by e-commerce operators and big companies restructuring their supply chains.