Primewest acquires Adelaide industrial property for $22m

Property fund manager Primewest (ASX:PWG) has now lifted the value of its Industrial Income Trust No.3 to $80 million following the purchase of a South Australian distribution centre for $22 million.

The high-profile Border Express property in the Northern Adelaide industrial Precinct represents the fifth acquisition for the trust since it was launched in July last year.

The first was Toll Group's state-of-the-art distribution centre in the Chevallum Industrial Park on Queensland's Sunshine Coast, where Primewest purchased the land and then entered into a forward-funded development agreement with a national developer to build the facility.

This was followed by an industrial and logistics facility in South Australia on a 17-year lease with Mastec Australia.

Primewest Managing Director David Schwartz says the trust had subsequently purchased the Lincraft distribution centre in Derrimut, Victoria and the Bureau Veritas Perth headquarters, where Primewest was able to secure a new 10-year lease during the due diligence period.

Schwartz says there are still a number of acquisition options in the pipeline as well as an opportunity to raise further funds.

"Border Express was a significant acquisition for the trust enabling it to uphold a 7 per cent pa cash distribution to investors," he says.

"A new five-year lease was signed at settlement and of the 50,000 plus square metres of land, only 41%per cent is occupied, allowing for further development potential.

"We are looking to raise more funds for our acquisition pipeline."

The newly acquired property currently returns a net passing income of $1.439 million.

Schwartz says Primewest remains confident in the future of key industrial and logistics markets nationally, as it continues to benefit from Australia's growing exposure to online retailing and e-commerce as a result of COVID 19.

Business News Australia