TOLL SELLS ALTONA SITE FOR $22M

The listed freight distribution and logistics company Toll Holdings has sold one of its industrial sites at Altona, west Melbourne, for $22 million to a private family. Toll property director Michael Fox said the transaction, struck on a yield of 8 per cent, sent a strong message to those who think industrial property yields should be much higher. “It has been awhile since we have seen a result like 8 per cent for an industrial property over $20 million” he said. “I hope this result helps those trusts and institutions that are being told the market is at 8.5 per cent to 9.5 per cent and beyond – because its not.” He said. The purpose-built office warehouse of 18,100 square metres with 30,000 sqm of medium to heavy-duty hardstand is under construction for NQX Freight System, a wholly owned subsidiary of Toll Holdings, which will lease back the building for 12 years from settlement. The development, at Horsburgh Drive, is just one of a few that Toll Property Group is developing after it bought a 50 hectare site from Dow Chemicals several years ago. Vinci Carbone Property Director Joseph Carbone negotiated the deal and said he was seeing a notable rise in demand for industrial properties. ‘We are seeing that private high net worth individuals are prepared to step up for premium-quality property assets,” he said. “Obviously the 12 year lease covenant to Toll, together with significant depreciation benefits, were major factors. “This result is testament to the strength of the private-investor market and the lack of quality industrial investment stock currently available”. Toll’s first purchase in Altona was the former BP oil refinery 10 years ago. The group went on to develop and on sell eight buildings in the first estate on long leasebacks. Toll reported a $270 million profit for the year ended June 30, beating expectations. The Altona transaction follows the sale of Goodman Group’s Regal Business Park at Rowville in western Melbourne, also at $22 million, but on a yield of 9.2 per cent. Toll declared a final dividend of 13.5c, taking the full year dividend to 25c, in line with last year.