Cadence Property Group (Cadence) is pleased to announce the successful acquisition of 125-175 Patullos Lane, Somerton, Victoria.
This acquisition marks the second investment made by the Cadence Australian Real Estate Partnership I (CAREP I), Cadence’s flagship multi asset value-add fund. CAREP I will hold a 50% interest in the asset, with the remaining 50% held in the Cadence Direct Industrial Trust No. 4 (CDIT No. 4), which was established to invest into the asset.
Situated in an area poised for significant growth, the 121,700 sqm site was secured for $48.25 million and consists of a large-scale manufacturing facility leased to a single tenant on a long term basis.
Cadence has consistently aligned similar purchases with the business’ objective of identifying well priced assets that provide both strong downside protection and viable upside scenarios. This was reflected in CAREP I’s first purchase at 525 Geelong Road, Brooklyn, Victoria after it secured over $55 million of capital in May this year.
“We are excited about the acquisition at Patullos Lane and the prospects it holds for our investors,” said Cadence Head of Investment Management, Tony Mount. “The property is fully leased to a high-quality tenant and has a site coverage of only 27%. There is potential to increase income during a long-standing tenant’s occupancy while benefiting more broadly from its under-developed nature and the ongoing improvement of the surrounding area.”
The site’s appeal is bolstered by the presence of a long-term tenant, Steel Mains Pty Ltd, with a remaining lease period of 6+ years, enhancing the overall financial outlook of the investment. Steel Mains Pty Ltd is Australia’s largest manufacturer and supplier of water pipeline systems.
This acquisition builds on Cadence’s existing presence in Melbourne’s north, including a significant landholding within Craigieburn’s North Employment Area Precinct Structure Plan.
“We have been very active in Melbourne’s north over the last few years and continue to have a high level of conviction in its future growth potential.” said Cadence CEO, Charlie Buxton. “Beyond the appeal of the location, the asset ticked a number of boxes we specifically look for through our value-add strategy including buying well below replacement cost and the ability to generate reliable income returns”.
Cadence looks forward to reporting further on CAREP I and CDIT No. 4 for investors.