Institutional-grade industrial facility in Adelaide’s northwest sold by Knight Frank

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Nov 5, 2024

Institutional-grade industrial facility in Adelaide’s northwest sold by Knight Frank

A core industrial facility in Adelaide’s northwest, 13-117 Bedford Street Gillman sold by Max Frohlich and Ryan Mills of Knight Frank on behalf of the vendor, Trilogy Industrial Property Trust.

Knight Frank

13-117 Bedford Street Gillman sold by Knight Frank

A core industrial facility in Adelaide’s northwest has sold in the first industrial transaction over $10 million in the city this quarter.

The property at 13-117 Bedford Street in Gillman, which consists of an 8,894sq m facility on a 15,020sq m site, was purchased by Adelaide-based property syndicate, Harmony Property Investments (HPI), for $20 million.

The off-market deal was negotiated by Max Frohlich and Ryan Mills of Knight Frank on behalf of the vendor, Trilogy Industrial Property Trust.

The prime grade facility is fully leased to two tenants – national tyre wholesaler Tyremax Pty Ltd and national packaging distributor Plasdene Glass-Pak Pty Ltd, providing a Weighted Average Lease Expiry of 4.64 years (by income).

The asset sold at an initial yield of 5.76% and market yield of 6.01%, providing the latest barometer for core industrial yields in South Australia.

The Gillman industrial facility was originally developed in 2018 by Frasers Property Australia in a joint venture with CIP Constructions.

It has ESFR sprinkler systems and a 10-metre-high springing clearance warehouse, with each tenancy having its own corporate office.

Additional features include cantilevered awnings on the northern side of the warehouse, on-site car parking for 43 vehicles to the southern side of the warehouse, loading docks, and extensive fully-fenced hardstand areas.

Mr Frohlich said the property is a well-located industrial facility of the highest quality, which were major factors attracting the buyer.

“High-quality industrial properties that are well-located and leased to strong tenants with secure income are arguably the most sought-after asset class in the current market,” he said.

“The Gillman industrial facility is in a strategic location in one of Adelaide’s premier industrial precincts, with access to major heavy vehicle transport links, the Port of Adelaide and Flinders Ports international container shipping terminal located at Outer Harbour.

“Only eight industrial properties have sold for more than $10 million this year to date in Adelaide, with this sale being the ninth and the first sale this quarter so far.”

In the previous quarter only two industrial properties in this price range changed hands, one of which being the Thebarton super lot at Smith Street, Cawthorne Street and Light Terrace, which sold for $23,625,000 in July 2024 in another deal negotiated by Knight Frank.

Mr Mills said: “Knight Frank’s Capital Markets Team in South Australia is fortunate to provide our clients with a full service offering across all sectors including industrial which gives us unique insight not only into what capital is looking for in South Australia but at what risk return profile across those asset classes.”

“While the industrial occupier market has experienced the lion’s share of rental growth and transaction volumes have slowed nationally, it is clear industrial is still a preferred sector with several active mandates looking to place capital in our state.

“Now that a new benchmark has been set, and with several other deals at play, we are confident transaction activity will increase for the remainder of the fourth quarter.”

Tom Isaksson of HPI said the property at 113-117 Bedford Street was considered to be a strategic addition to its Harmony Canning Vale Fund, offering robust fundamentals with stable income distributions.

“With its strategic location, modern specifications, and rental growth potential, the property is well positioned for capital appreciation,” he said.

“The property is positioned close to a large amount of new development occurring in the area, including investment in naval and defence infrastructure near Outer Harbour.

“It is also fully leased, providing solid income, and we consider there is some positive rental reversion which can be unlocked when the current leases are renewed due to the current low industrial vacancy rate of less than two per cent.

“Another drawcard for the investment was that no stamp duty is payable on acquisitions in South Australia, making purchase yields in this state more favourable compared to those in other Australian states.”