Logos Property Group, backed by Ivanhoé Cambridge and Macquarie Capital, has beaten 10 other bidders to invest AUD161m (€117m) in a logistics asset in west Sydney.
Logos bought the property, anchored by the Australian supermarket chain Woolworths as its regional distribution centre in the suburb of Minchinbury, from the Australian Prime Property Fund (APPF) Industrial Fund, managed by Lendlease.
The asset has an average weighted lease expiry of five years.
The purchase will go into the unlisted Logos Australian Investment Venture, which has recently approved a AUD500m budget to acquire prime industry assets that offer value-add opportunities.
Gavin Bishop, national director of industrial sales at Colliers International, told IPE Real Estate that demand for prime Australian core industrial assets continues to be strong from both domestic and offshore buyers.
“There is a lot of global interest in this kind of asset, especially in Sydney,” said Bishop.
Minchinbury is regarded as an institutional grade location, supported by companies including Aldi, the German supermarket chain, and Australian logistics player StarTrack Express.
Bishop said diminishing supply and the prospect of rental growth is driving investor demand. Rents in some areas of Sydney have started to rise, he added.
Colliers International has handled several large industrial sales in Australia, including two tranches of Goodman Group’s logistics assets which sold to Blackstone last year for almost AUD1.3bn in two tranches.
Bishop said Logos has appetite for more assets, both in Sydney and other capital cities.
He said the focus is on Sydney as the city has benefitted from government infrastructure development in recent years.
With capital backing, Logos has more properties under review and has briefed agents to look for greenfield sites and properties suitable for development or redevelopment.
Market sources say Logos has developed more than 100,000sqm of industrial assets, valued at around AUD300m, in western Sydney.
Logos is understood to have the second-largest industrial pipeline nationally after the Goodman Group, and expects to grow its Australian portfolio over the next three years by more than AUD1bn.
The firm has also invested in China, where its partners include Ivanhoé Cambridge and CBRE Global Investment Partners. It is also developing a southeast Asia platform, focusing on Indonesia where e-commerce is growing exponentially.