Distribution and logistics centres continue to ride a wave of value growth and popularity with investors, with ASX-listed Centuria Industrial REIT acquiring the Quiksilver facility in North Geelong for $22.8 million.
Fitzroys Director, Paul Burns brokered the off-market sale of 75-105 Corio Quay Road on behalf of a private investor.
The 21,772 sqm facility is on a 3.763-hectare site and is used by the iconic surfwear brand as its Asia Pacific distribution centre.
The site comprises two modern, high-clearance industrial warehouse and office buildings connected by a fully enclosed transit area. The southern warehouse, built circa-2010, has a clearance of 12.2 metres.
Late in 2018, the tenant entered a new five-year lease until late 2023, with a five-year option, on a deal that returns $1,876,290 per annum with 3% annual increases. The decision was made on the back of the property being chosen for the consolidation of the distribution centres of Quicksilver and the newly acquired Billabong business.
Burns said Quiksilver had made a significant commitment to the property and the Surf Coast area, where they have been for many years. They recently made further upgrades to accommodate business expansion that include additional warehouse racking, office refurbishment and refitting, and increased staff amenities.
The consolidated Quicksilver and Billabong centre will see turnover at the facility go from around 4.5 million units to circa 10 million units once in full operation in the coming months. The onsite workforce is expected to increase by around 30 full-time positions and approximately 50 part-time.
Quiksilver is part of the Boardriders Inc. company, owned by New York-based Oaktree Capital Management, and which includes major retailers Billabong, Roxy and DC Shoes. The brand was founded in in Torquay 50 years ago.
“Growth in online shopping and demand for more efficient delivery and a bigger range of products across the retail industry has increased requirements for logistics systems and facilities,” Burns said.
“Industrial real estate is now among the most sought-after investment classes, and land values are expected to rise further in the coming years.”
Burns said there is heightened investor demand for strategically located logistics assets with quality fit-outs and strong lease covenants.
Burns negotiated the last sale of the property in late 2016. Then, the facility was part of a package that included an adjoining 1.244-hectare development parcel of land - not included in the latest deal - which sold together for $19.5 million.
A-REITs have substantially increased their share of transaction volumes, with a number of listed and unlisted funds now undertaking portfolio repositioning programs increase their exposure to the logistics and industrial sector.
Burns said Centuria Industrial REIT was attracted to the property’s quality and location near major transport infrastructure.
Located in Australia’s second-fastest growing city, the property is directly opposite Geelong Port, which saw record throughput volumes over 2018/19 that are expected to surge from 12 million tonnes to 32 million tonnes by 2048.
It is also within 15 minutes of Avalon Airport, and less than one hour from both Melbourne Airport and Port of Melbourne.
The National Faster Rail Agency has just been established following the federal government’s $2 billion commitment to a high-speed rail network between Melbourne and Geelong that would cut travel times to just 32 minutes. Geelong is also welcoming major investments in manufacturing and industry, including the $100 million expansion of Carbon Revolution’s Waurn Ponds facility; Pelligra’s transformation of the former Ford manufacturing facility into a high-end industrial and business park; and construction of new wind turbines at Berrybank and Dundonnell.