Australian real estate investment trust Dexus has sold an industrial facility on Sydney’s lower north shore to Gateway Capital and Invesco for A$118.5m (€76m).

The Gateway Capital and Invesco Real Estate joint venture, set up in April this year, acquired 12 Frederick Street, St Leonards, which is the second stage of Dexus’ North Shore health hub project.

Dexus sold the first stage of 12 Frederick Street to its Healthcare Wholesale Property Fund on a fund-through arrangement in 2019. The company said the sale of the second stage of the project was expected to contribute approximately A$50m to the group’s pre-tax trading profits in the current financial year.

The acquisition is the third made by the joint venture following purchase of 61 Milperra Road, Revesby in Sydney and 8-14 Burns Road, Altona in Melbourne in June.

Ian Schilling, Invesco Real Estate managing director and co-chief investment officer, said: “This asset fits well into our urban infill logistics strategy given its prime location, diverse tenancy profile and high underlying land value.

Schilling, who is also Invesco’s head of Asia-Pacific core funds, said that despite the current volatile environment, Invesco expected the asset to deliver solid income growth via both inflation-linked rent reviews and market rent growth, in a precinct with virtually no vacancy or new supply.”

He told IPE Real Assets the asset was earmarked for the Asia Core Real Estate strategy.

Stuart Dawes, Gateway Capital CEO and managing director said: ”We expect the assets acquired in the Gateway and Invesco strategy to continue to experience solid income growth driven by the strong occupier demand coupled with Gateway Capital’s active management approach.”

Peter McDonald, Gateway Capital managing director - Property, described the property as a “highly attractive trophy type” asset that rarely became available to purchase.

“This asset has all the attributes to capture the upper end of rental growth that is prevalent in our market at present,” he said.

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