In late December at Trilogy, we were able to confirm settlement of our industrial warehouse facility in north-western Adelaide suburb of Gillman, had been finalised, the transaction signaling the close of a nation-wide search for assets to strengthen our popular Trilogy Industrial Property Trust (Trust).
Acquired as a new build site, construction has since been completed on the $14 million property, with anchor tenant Tyremax Pty Ltd who’s lease secures more than 70% of gross lettable area over a 5-year term of occupancy. The second tenancy is being marketed for lease and is secured by a three-year income support deed from the vendor.
Our Managing Director Philip Ryan expected the Gillman property to be a strong performer for the Trust.
“The new property shapes as a robust addition to the Trust. A reputable long-term tenant is secured and economic indicators suggest favourable leasing activity and demand for industrial property in Adelaide. I’m confident that this durable property will help deliver consistent income returns to our investors,” he said.
Philip’s views have been echoed by a number of commentators. Colliers International’s recent Industrial report highlighted the continued momentum building in the Adelaide industrial market.
According to the report, Adelaide sales volumes exploded in the second half of 2018, with more than $200 million of industrial assets changing hands so far this year – well above average.
Industrial vacancies are down in suburbs to the south and west of the city, with high land values and stable yields.
Meanwhile, northern suburbs such as Gillman and Osbourne are benefiting from an increase in government investment to support Naval construction projects. Vacancies have increased slightly as the northern market transitions from the closure of Holden’s manufacturing plant to new opportunities, however, it has not slowed the growth of net face rents, with increases of 2.4% in the area.
Our team made its foray into South Australia’s industrial sector following moves from the State government to abolish stamp duty on qualifying property and to introduce significant land tax reforms luring many other private investors and fund managers back to the sector.
Philip says exploratory investment journey into South Australian territory was unlikely to be a one-off, particularly when favourable forecasts and investment conditions persisted.
“Despite the recent closure of several large manufacturing operations in the region, South Australia has demonstrated that it has more to offer than just quality wine exports and automotive assembly…”
“There is a significant pipeline of multibillion-dollar construction contracts coming online. Unemployment is at its lowest in years and business confidence is up in the defence, renewable energy, hi-tech manufacturing, space technology and e-commerce sectors.”
“Warehouse distribution centres, logistics and cold storage facilities are required to support these industries and a limited supply of existing stock is driving demand.”
The Trilogy Industrial Property Trust is an open-ended, unlisted property trust with a diversified portfolio. The new property in Gillman joins a portfolio comprising two other industrial properties in Paget, Mackay (QLD). The new property provides investors in the Trust with diversification in terms of tenant-type and geographic location.
The Trust has an expected forecast distribution yield equivalent to 8.25% p.a. paid monthly from 1 December 2018 to 30 June 2020.
Settlement of the Trust’s new property occurs amid an active investment period for our team and investors. Our unlisted single asset property trust; the Milton Office Trust has completed the acquisition of its asset in Milton, Brisbane. The new $25.5 million property provides investors with access to the returns available from commercial property in a strengthening near-city office market and a forecast distribution yield equivalent to 7.50%p.a. paid monthly.
If you’re considering your own investment in the industrial property market, it’s not too late to learn more about the Trilogy Industrial Property Trust.
Trilogy has issued a Product Disclosure Statement for the Trilogy Industrial Property Trust dated 1 November 2018 which is available at www.trilogyfunds.com.au or by contacting us. Applications will only be accepted on the current application form that accompanies the PDS. You should obtain a copy, understand the risks, and seek personal advice from a licensed Financial Adviser before investing. Investment in the Trust is subject to terms and conditions, and risks which are disclosed in the PDS. These risks include the risk of losing income or principal invested. The Trust is not a bank deposit and Trilogy does not guarantee its performance. Trilogy provides only general financial product advice on its own products and does not consider your objectives.
The material on this website is intended only to provide a summary and general overview on matters of interest. Trilogy is only licensed to provide general financial product advice on its own products and does not consider your objectives, financial situation or needs when providing any information or advice. You should consider whether the advice is suitable for you and your personal circumstances and we recommend that you seek personal financial product advice on your objectives, financial situation or needs and obtain and read the relevant product disclosure statement before making any investment decision.