Investor Secures NT Warehouse With National Tenant

An investor has purchased an industrial property outside Darwin for $2.575m after LJ Hooker Commercial North NT secured a national tenant for the property.

LJ Hooker Commercial North NT secured a new five-year lease, circa nett $200,000 per year plus GST and outgoings, on the 4,840sqm allotment site. The deal reflects a passing yield of 7.14%.

The site, at 22 McKenzie Place, Yarrawonga, is in an established industrial precinct 25 minutes from Darwin’s CBD with access to the Stuart Highway. The property encompasses a high clearance warehouse and showroom and extensive hardstand.

Three-year and two-year options follow the current lease.

LJ Hooker Commercial North NT’s John Grant and Lee Doyle secured the sale for the seller.

Mr Grant said industrial yields in the NT varied between 7 and 8 percent. Results depended on several issues with the quality and commitment of the tenant the deciding factor.

The property was formerly tenanted by John Deere but the global ag-machinery specialist chose to consolidate several operations in the Territory at another site.

“The owner was keen to realise the growth in the market,” said Mr Grant. “With John Deere leaving, we knew a high-quality tenant was needed to be locked-in before we went to market to maximise the result for the seller.

“The property had good improvements with the warehouse and office and access to the Stuart Highway, so we knew it would attract the interest of a national tenant.”

Foodbank, the 'pantry to the charity sector’, committed to the lease recently. Following a short sales campaign, LJ Hooker Commercial North NT settled the sale of the property to a local investor.

“The deal was at the tighter end for industrial and reflects the security of the tenancy and the tenant,” said Mr Grant.

The high clearance warehouse spans 838sqm with seven high clearance motorised roller doors. The adjoining office / showroom has a floor area of 302sqm and houses five offices and a meeting room.

The property has 13 car spaces and a 62sqm wash bay.

Mr Doyle said the industrial market was buoyed by the public investment in the NT.

In the works for the region is:

• a record $5bn road funding commitment from the NT Government;
• $6bn worth of investment between the Australian and US governments for new and improved defence assets;
• $1.5bn to develop commercial grade facilities in Darwin suited for resources or manufacturing enterprises;
• $4bn Federal-Northern Territory governments’ investment in housing in remote communities, accounting for up to 270 homes to be built each year over a decade.
  
  

“Industrial values and rents have held-up well in recent times and there’s a lot of infrastructure in the pipeline that's underpinning confidence in the Territory,” said Mr Doyle.

 “Investors are appreciating the returns on offer in Darwin and the surrounding regions compared to other capital cities.”