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  • Dexus and APN Industria REIT (ADI) have paid $1.5 billion for a portfolio of industrial assets which includes Perth’s Jandakot airport
  • Dexus has agreed to buy a 66.7 per cent interest in the businesses that control a ground lease at Jandakot Airport, with ADI purchasing the remainder
  • For a total consideration of $125.4 million, Dexus and ADI will also jointly acquire a 42,500 square metre logistics facility in NSW
  • Shares in Dexus are up 1.01 per cent to $11.03, while API is trading in the grey at $3.74 at 11:22 am AEST

Dexus (DXS) has acquired a portfolio of industrial properties alongside APN Industria REIT (ADI) for a total purchase price of $1.5 billion, including Perth’s commercial Jandakot Airport.

Dexus has agreed to purchase a 66.7 per cent interest in the businesses that control a 76-year ground lease at Jandakot Airport, with ADI purchasing the remaining 33.3 per cent stake, for a total of $1.3 billion.

The present structure comprises $405 million in senior asset-level debt, which will be retained after purchase, resulting in a total equity commitment of $895 million.

Acquired off-market, the $1.3 billion includes $875 million for a diversified portfolio of 19 industrial properties leased to more than 54 tenants across roughly 360,000 square metres, reflecting a 5.2 per cent initial yield.

Rounding off the purchase price is $225 million for 80 hectares of developable land and $200 million for the operating airport.

Jandakot Airport is Western Australia’s main general commercial aviation airport, covering 620 hectares and located 20 kilometres south of Perth’s CBD and 25 kilometres south of Perth Airport. 

With a weighted average lease term of 7.6 years, the portfolio is 100 per cent occupied while the airport enjoys a weighted average lease expiry of more than 14.6 years.

Dexus will purchase 100 per cent of Jandakot City Holdings (JCH) and 49 per cent of Jandakot Airport Holdings (JAH), the business that holds the ground lease, for approximately $825 million.

The company said it planned to bring in ADI for 33.3 per cent shortly after initial settlement, as well as additional third-party equity capital partners into the Jandakot structure before the remaining 51 per cent of JAH is settled.

This would result in Dexus’s overall balance sheet interest in both JCH and JAH reflecting an equal minority interest.

Settlement of the 51 per cent remaining of JAH for $70 million is expected in March 2022, after the receipt of regulatory clearances and the obtaining of equity commitments from additional third-party capital partners.

For a total consideration of $125.4 million, Dexus and ADI will also jointly acquire a 42,500 square metre logistics facility at Lot 2, 884-928 Mamre Road, Kemps Creek, NSW as a fund-through development.

The facility is near Dexus’ development site at 113-153 Aldington Road in Kemps Creek, where the company has a pre-commitment with McPhee Distribution Services for a 72,000 square metre logistics complex.

From July 2022 to May 2023, progressive land and development payments will be made, with the vendor/developer offering a 4.25 per cent discount throughout the construction period.

Dexus CEO Darren Steinberg said the investments would further enhance the company’s portfolio with development potential and scope to enhance returns from third parties.

“This transaction also provides the opportunity to achieve a step change for ADI as it secures an interest in quality logistics-oriented real estate with embedded development potential,” he said.

“We see considerable opportunity in ADI and will be supporting the equity raising announced today.”

Dexus chief investment officer Ross Du Vernet said the group’s industrial portfolio was expected to grow to $11.3 billion post completion of the near-term developments and recent acquisitions.

Shares in Dexus are up 1.01 per cent to $11.03, while API is trading in the grey at $3.74 at 11:22 am AEST.

DXS by the numbers
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