Garda Diversified Property Fund announced on 14 June that it is acquiring a four-hectare freehold industrial facility in the Australia Trade Coast precinct for AUD19 million (USD14 million).
The acquisition value represents an initial yield of 7.4% with a pre-committed 15-year lease to a subsidiary of Byrne Group, a recycling entity that is active across the state of Queensland.
The property, which is located at 70-82 Main Beach Road, Pinkenba, Queensland will operate as a resource recovery facility for soil, rock, gravel and construction materials that has not been treated with any noxious or household materials, said Garda Diversified Property Fund in its statement.
“The ever increasing regulatory controls continue to support the sustained and strong growth of the construction recycling industry”, said Garda’s Executive Chairman Matthew Madsen.
“Differing regulatory frameworks between the Australian states also provides continuing competitive advantage for Queensland based facilities”, he added.
The facility is an expansion of an existing larger operation by the Byrne Group in the same area, and is adjoining the Brisbane airport, and northern side of the Brisbane River.
Construction on the land, which include the building of a hardstand and various site offices, is expected to begin after June 2017, and this is expected to complete by January 2018.
The acquisition will initially be debt funded with loan-to-value ratio expected to increase to approximately 44%.
Units of the fund are currently listed on the Australian Securities Exchange at AUD1.09.