This article was written by Ingrid Fuary-Wagner, Australian Financial Review Reporter, originally published by the Australian Financial Review on October 14, 2020. It is reproduced here in full without amendment.
A capital raising by Trilogy Funds Management saw investors pour $18 million into its industrial property trust in the space of a week, highlighting the demand for long-term capital growth.
The capital will be used by the Trilogy Industrial Property Trust to bolster its property portfolio, starting with the acquisition of its first industrial property in Brisbane.
The capital raising will partially fund the acquisition of 37 Gravel Pit Road, Darra, in Brisbane.
Investors had to invest a minimum of $20,000 with an offer amount of $18,155,000 at $1.02 per unit.
The trust already holds assets across South Australia and Queensland, and this latest acquisition takes the number of properties in the portfolio to seven, and a value of almost $70 million.
The latest aquisition, at 37 Gravel Pit Road, Darra, comprises a total of 15,300 square metres including a high bay warehouse with crane rails and a commercial-grade office over two levels.
It is located about 17 kilometres south-west of the Brisbane CBD, in one of the city’s core industrial precincts at the junction of two major transport routes, and is leased to a tenant with a six-year lease with three five-year option terms.
Trilogy Funds Management co-founder and managing director Philip Ryan said the industrial property sector continued to be one of the most sought-after property asset classes.
“With Australia’s historically low interest rates, there is a very strong appetite for investments in the industrial property sector right now due to its potential for competitive yields with long-term capital growth prospects,” Mr Ryan said.
“Demand for industrial property in Australia should continue to rise – particularly as institutional investors gear their strategies toward greater exposure in the industrial sector and build their investment portfolios.”
He said the acquisition of the Darra property was an opportunity to diversify the trust’s portfolio, in terms of income, tenant type and geographical location.
“Our strategy is to look for quality investment properties that have tenants who are primarily exposed to mining, manufacturing and logistics. We are finding that exporters are benefiting from high commodity prices and a reasonably low Australian dollar relative to the US dollar,” Mr Ryan said.