Dexus and one of its funds, APN Industria REIT, have acquired Western Australia’s Jandakot Airport and an adjacent industrial estate for A$1.3bn (€805m) from Ascot Capital and South African billionaire, Nathan Kirsch.
Dexus will initially own 66.7% of both the airport, which has another 72 years of concession to run and the adjoining Jandakot City industrial Estate – with APN holding 33.3%.
Darren Steinberg, Dexus CEO, said: “The near-term development potential and scope to enhance returns by introducing third-party capital make this a compelling opportunity.
“The transaction also provides opportunity to achieve a step-change for APN as it secures an interest in quality logistics-oriented real estate with embedded development potential,” said Steinberg.
Ross Du Vernet, Dexus chief investment officer, told IPE Real Assets that Dexus and APN were buying the operating business of the airport, which owned the leasehold interest in the land, along with 50 stabilised industrial assets and development land.
“The aeronautic income from airside services is only a small fraction of the total income,” he said. “Most of the revenue in the airport operation business is related to real estate, such as charges for infrastructure.”
Du Vernet said Dexus would look for third-party capital to invest in the whole transaction, including the airport, the stabilised assets and the development land.
“Our preference is to retain a meaningful stake of around a one-third interest in the long term,” he said.
“We now have a sizeable portfolio of 360,000sqm of gross floor area and development (site) ready to go.”
Over the next five to seven years, Dexus and its partner/s would be investing around A$400m to develop the land, making this a significant investment valued at a total of some A$1.7bn.
“An attractive feature of this deal is that will gain more than 10 national retailers, and logistics users of the 50 stabilised assets,” Du Vernet said.
“We don’t have a relationship with these tenants and we see an opportunity to bring them into other parts of our logistics portfolios on the east coast.”
APN fund manager, Alex Abell, described the transaction as “a compelling opportunity” for the REIT to achieve transformational growth and to capitalise on strong momentum in the industrial sector.
To fund its share of the deal, ASX-listed APN is undertaking a fully underwritten equity raising for A$350m. Dexus is taking up its full A$40m entitlement in the capital raising.
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