Burstone Group (formerly Investec Property Fund) has announced that its Australian joint venture (JV) with the Irongate Group, which was formed in March 2023, has acquired its first industrial property in New South Wales, Australia, for A$57.25 million (c.ZAR 680 million). The Irongate JV will provide the 20% co-investment equity and the fund management capabilities for the deal.
The acquired properties, with a total net lettable area of c.17,500m2 across eight buildings are in Western Sydney’s Smithfield, where vacancy rates are 0.2%. The estate, with functional improvements focused on smaller users, is currently occupied by multiple tenants, and has a weighted average lease expiry of 1.7 years.
The acquisition is supported by a co-investment from APAC-focused private equity real estate investment group, Phoenix Property Investors (Phoenix) for 80% of the equity.
“We believe this acquisition will showcase how we at Burstone can unlock value in the assets we acquire and manage. It supports Burstone’s capital light strategy, which leverages the skills within our business and partnerships to provide new sources of income through management and performance fees, in addition to capital returns and property yield, which enhances returns on our deployment of capital,” comments Andrew Wooler, CEO of Burstone Group.
“The transaction is in line with our Irongate investment philosophy which focuses on low-risk infill sites with large land holdings, acquisitions at below land-and-replacement cost and, under-utilized, income-generating properties with strong positive rental reversion, all of which this acquisition is set to deliver,” notes Graeme Katz, CEO of Irongate Australia.
