- The property was sold for almost $23M
- The asset sold fully occupied with a WALE of 2.5 years by income
- The sale price represents a $2.1 million discount to book value at December 2022
A private investment company has acquired two separately titled industrial facilities from Dexus Industria REIT (ASX: DXI) for $22.925 million.
Arrow Capital Partners purchased 3 and 4 Forbes Close, Knoxfield, Victoria, totalling 12,674 square metres on a combined landholding of 2.4 hectares.
The asset sold fully occupied with a WALE of 2.5 years by income, allowing for significant future positive rental reversion in the short-term. The passing rental is considered well below current market levels.
The deal was negotiated by Chris Jones, Adrian Rowse and Charlie Holmes of Cushman & Wakefield in conjunction with Ben Hegerty and Jack Kelliher of JLL on behalf of DXI, with vacancy levels of less than 1% throughout the Eastern corridor showing unprecedented occupier and tenant demand.
“The property generated significant interest from a wide cross section of privates, syndicators and funds who were attracted to the asset’s strong location characteristics, high underlying land value and the precinct’s minimal vacancy,” said Jones.
DXI fund manager, Alex Abell, said: “This divestment brings total sales contracted throughout FY23 to approximately $250 million, as we continue to actively position DXI to take advantage of future investment opportunities.”
The ASX-listed company said the proceeds from these sales will initially be used to repay debt, reducing look-through gearing by approximately one percentage point.
The sale price represents a $2.1 million discount to book value as at December 2022, and settlement is anticipated in August 2023.
Together with the sale of 16-28 Quarry Road, Stapylton, it represents an average 2% discount to the 31 December 2022 book value.
Stapylton property sold for $66.9M
DXI announced that it agreed to sell the Stapylton property on 9 June 2023 for $66.9 million; the company said the price is broadly in line with the 31 December 2022 book value.
In a statement regarding the Stapylton property, Abell said: “In the past eight months we have contracted to sell approximately $230 million of assets, which is a great result for the Fund’s balance sheet and positions DXI for future potential opportunities. Proceeds will initially be utilised to repay debt, and in due course will be deployed into higher returning opportunities.”
Settlement for the Stapylton property is expected in October 2023.
Portfolio valuations update
Today, DXI announced that 91 of the company’s 94 assets have been externally valued, reflecting all assets except those held for sale.
The draft valuations have resulted in an estimated net devaluation of $28.3 million for the six months to 30 June 2023, representing a 1.8% decrease on prior book values.
The weighted average capitalisation rate across the total portfolio expanded 25 basis points over the six months from 5.13% at 31 December 2022 to 5.38% at 30 June 2023. The weighted average capitalisation rate expanded 26 basis points on a like-for-like basis.
“Strong industrial rental growth continues to enhance future cash flows, which has largely offset the impact of cap rate expansion across DXI’s $1.4 billion portfolio,” said Abell.
