November 22 2023
Burstone Group announced that its Australian joint venture (JV) with Irongate has acquired its first industrial property in New South Wales, Australia for A$57.25m (R680m. The Irongate JV will provide the 20% co-investment equity and the fund management capabilities for the deal.
Burstone formed a joint venture with the management team of Irongate in March 2023.
The acquired properties, with a total net lettable area of c.17,500m2 across eight buildings, are located in Western Sydney’s Smithfield, where vacancy rates are 0.2%. The estate, with functional improvements focused on smaller users, is currently occupied by numerous 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.
Phoenix, with $7.9bn of current assets under management (AUM), is already an investor in one of the existing Irongate properties and this investment will mark Phoenix’s second in Australia in its Phoenix Pan Asia Core Plus Investments Fund.
“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,” Andrew Wooler, CEO of Burstone said.
Graeme Katz, CEO of Irongate Australia said:
“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.”
Burstone was previously known as Investec Property Fund.
alistair@propertyflash.co.za
