Assembly Funds Management (AFM) and Cadence Property Group (Cadence) have sold three warehouses in Melbourne’s south-east for total consideration of $47 million, ahead of investment underwrite.

Following an off-market approach for the assets in late 2023, Colliers were appointed to complete a formal sales campaign which culminated in the sale of 345-353 South Gippsland Highway and two warehouse facilities at 51-65 Nathan Road and 88-90 Nathan Road in Dandenong South.

The assets were sold to a combination of private investors and owner occupiers. Michael Gutman, CEO of AFM, commenting on the sale said, “We are pleased that our underlying thesis of significant supply constraints in in-fill markets driving rental growth materialised quickly in these three assets, and that we could achieve meaningful value uplift despite facing significant interest rises over the past few years.”

“While we continue to be believers in the tailwinds underpinning the Industrial and Logistics Sector, the sale crystallises an attractive return for our investors, and further bolsters our war chest in a time where we are beginning to see highly interesting opportunities for deployment”.

AFM recently completed the first close of its second multi-sector real estate fund taking committed equity to $465m, with c.$300m to deploy (including leverage).

“We are considering a number of potential investments and the flexibility of having a multi-sector fund that can invest in a mixture of debt and equity ensures we can target investments with the best risk-adjusted return for our investors”.

Charlie Buxton, CEO of Cadence said the off-market approach speaks to the continued demand for ready-made industrial property suitable for storage and logistics.

“Momentum in the industrial property sector has certainly carried into 2024, the relatively short timeframe of this deal is clear evidence of that.

“We’re fortunate to have a strong relationship with AFM who share our belief of remaining pro-active in securing positive returns on our shared portfolio and reacting to market opportunities.”

Gavin Bishop, Sean Thompson, Gordon Code, Daniel Telling and James Stott of Colliers negotiated the transaction on behalf of AFM and Cadence.

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