Fund manager EG has snapped up a prominent industrial asset in the Sydney suburb of Rockdale for $48.7 million in an off-market deal.
The property, currently fully leased to Bunnings at a weighted average lease expiry of 3.6 years, was sold on a passing yield of 5.4 per cent.
The site is in a tightly-held precinct south of Sydney Airport and will benefit from infrastructure upgrades including the M6 Motorway.
EG senior manager of capital transactions Will Clark said the property held flexible zoning offering multiple exit strategies in the future.
Founded in 2000 by property veteran Michael Easson and brothers Shane and Adam Geha, EG has $3.2 billion in assets under management with investments spread across half-a-dozen unlisted funds.
The fund has also padded out its development pipeline to $4.3 billion worth of projects.
“The fund currently has the potential to acquire a further $800m in assets, which will continue to grow over time,” EG fund manager Michael Noblet said.
“The strategy is to acquire well located industrial, office and retail assets across Australia with the potential to add value through active asset management.”
The Rockdale property will be the fourth addition to the EG’s ACE fund which was launched in mid-2019 with an initial equity commitment of $500 million.
The fund is actively targeting underperforming office, industrial and retail properties in order to reposition them as core investments and in turn generate higher returns.
In April, EG offloaded a retail centre on the Gold Coast for $61.8 million.
Macau businessman and casino owner Loi Keong Kuong picked up the Circle on Cavill shopping centre which had been on on the market since 2018 after EG picked it up in 2010 for $40 million.
In August, the fund manager acquired a $38.2 million multi-let industrial facility in Ingleburn after gaining approval for a $44 million site transformation at the Northern Beaches Business Park.
Shortly after, the fund manager secured a mandate from Singapore’s GIC to build up a $400 million property portfolio.
EG said it had secured the project agreement with GIC which would follow on from EG’s Yield Plus Infrastructure Fund No. 2 (YPI2).
EG’s strategy for its YPI2 is to acquire income-producing real estate near new or upgraded transport infrastructure.
GIC’s mandate is for EG to identify value-add opportunities across commercial, industrial and retail assets in Sydney and Melbourne.