Lift-off for IKEA centre buy-in
Posted on: March 28, 2022
Original Article from The Advertiser
Local fund manager ICAM has paid about $12m for IKEA’s South Australian distribution centre near Adelaide Airport.
The property will be added to ICAM’s Modbury Strategic Retail Trust, which manages the group’s recently purchased Bunnings site on North East Rd in Modbury.
IKEA’s distribution facility, on Transport Avenue in Netley, serves the retailer’s sole outlet in South Australia just 3.3km away.
ICAM managing director Freddy Bartlett said the site was located within a “tightly held and thinly-traded” freight and logistics hub.
“We are delighted to offer our valued investors access to another high calibre property which complements the Bunnings Modbury asset, with a similar strategic retail orientation and strong tenant covenant,” he said.
“We are eager to work closely with IKEA to accommodate their dynamic retail strategy and evolving nature of their supply chain.
“We believe the surrounding Netley industrial area will benefit immensely from Adelaide Airport’s planned redevelopment of the Airport East precinct, which is set to consolidate freight and logistics operators into a single nearby precinct, creating an efficient air freight and road interface.”
ICAM paid $22.8m for the Bunnings Modbury site last year, and is in the process of establishing a new diversified industrial fund targeting midmarket industrial, logistics, warehouse and development properties, “with solid covenants to capitalise on these strong tailwinds behind the industrial property sub-sector”.
“We expect capitalisation rates for strategically located industrial assets such as IKEA Netley to continue to gradually compress as the undersupply of land suitable for industrial development is exacerbated by expanding demand for industrial space,” Mr Bartlett said.
The IKEA transaction was brokered by Knight Frank’s David Ludlow and Oliver Totani.
ICAM, which has a diverse base of clients comprising institutional investors, family offices and high-net-worth individuals, owns a range of property and infrastructure assets, including 50 per cent stakes in Westpac House in the Adelaide CBD and the Churchill Centre North shopping centre.