An industrial facility in Perth’s south has been sold for more than $16 million following strong buyer demand in the sector.

The property at 41-43 Baile Road in Canning Vale was purchased by Westbridge Funds Management from Perron Group for $16.21 million in a deal negotiated by Tom Iredell of Knight Frank.

The office/warehouse facility has 10,460sq m of gross lettable area – consisting of 351sq m of office and 9,606sq m of warehouse space - on a 23,176sq m site.

It is leased to Blackwoods Pty Ltd, which is Australia’s largest provider of industrial and safety supplies and a wholly-owned subsidiary of Wesfarmers.

Mr Iredell said there was strong demand for the industrial facility from buyers, with in excess of 10 bidders in the first round of the request for offers campaign.

He said it was sold on a yield of 5.03%, which will increase to 5.23% with the February rent review and a short WALE of 4.28 years with the sale price exceeding expectations.

“It’s a well-presented and recently refurbished facility in a prime logistics location within proximity to Perth’s key transportation networks,” he said.

“It also has a strong lease covenant providing a secure, long-term income stream, so it was very appealing to buyers.

“The Western Australian industrial investment market is seeing historic yield compression on the back of low interest rates, the emergence of e-commerce, a well-performing mining industry and growing interstate investor appetite.

‘The yield gap between Western Australia and the eastern states is causing increased Institutional investment interest in Western Australian properties and secondary grade assets, driving yields lower for older style, sub $20 million properties such as this facility at Baile Road.”

Canning Vale is situated around 19 kilometres south of the Perth CBD, 18 kilometres east of Fremantle Port and 15 kilometres west of the Kewdale Freight Terminal.

It is well serviced by Perth’s major road network, with Roe Highway and South Street linking the precinct to other key arterial roads including Kwinana Freeway, Tonkin Highway and Leach Highway.

“The precinct benefits from high underlying land values and is well positioned for continued re- gentrification and undoubted growth,” said Mr Iredell.

Mr Damian Collins, Chairman at Westbridge Funds Management, said: “The recent settlement of the Canning Vale property, is a welcome addition to our Westbridge Diversified Fund No. 4 property portfolio.

“It fits within the Fund’s goal of building a $100 to $150 million portfolio featuring up to 12 high-quality commercial properties diversified by state, asset class and number of tenants.

“The strong covenant provided by the Westfarmers subsidiary, coupled with the high underlying land value makes this an excellent long-term investment.”

To request a sales analysis please contact the selling agent Tom Iredell of Knight Frank via the below contact details.