Irongate Group (ASX:IAP) to acquire two industrial properties for $20M

• Irongate Group (IAP) has entered into a contract to acquire two industrial facilities in Queensland for roughly $20 million
• The properties at Kingston and Morningside are being acquired on a fund-through basis and come off the back of a recent $24.75 million acquisition of an industrial facility in Pinkenba, Queensland
• The total purchase consideration for the 57 – 83 Mudgee Street Kingston property is $14.32 million
• Meanwhile, the total purchase consideration for the Lot 24, Dunhill Crescent, Morningside property is $5.932 million
• The Kingston Property will comprise two brand new generic warehouse and distribution facilities
• The Morningside Property comprises 1016 square metres of space that will be leased to 3M Australia for use as its Queensland head office and last mile distribution facility

Irongate Group (IAP) has entered into a contract to acquire two industrial facilities in Queensland for roughly $20 million.

The properties at Kingston and Morningside are being acquired on a fund-through basis and come off the back of a recent $24.75 million acquisition of an industrial facility in Pinkenba, Queensland.

The total purchase consideration for the 57 – 83 Mudgee Street Kingston property is $14.32 million, which represents an initial yield of 5.73 per cent (5.67 per cent post all transaction costs).

The purchase consideration comprises an initial payment of $3.05 million for the land with the balance to be progressively paid until completion of construction, which is anticipated to occur in December 2021.

The Kingston Property will comprise two brand new generic warehouse and distribution facilities with 2270 square metres leased to Construction Sciences for 10 years with fixed annual escalations of 2.5 per cent and 3250 square metres leased to Waco Kwikform for eight years with fixed annual escalations of 3.0 per cent per cent.

The total purchase consideration for the Lot 24, Dunhill Crescent, Morningside property is $5.932 million, which represents an initial yield of 6.02 per cent.

Irongate will pay an initial payment of $1.252 million for the land with the balance to be progressively paid until completion of construction, which is anticipated to occur in November 2021.

The Morningside Property comprises 1016 square metres of space that will be leased to 3M Australia to be used as its Queensland head office and last mile distribution facility.

The lease term is 10 years from completion of construction with rents of
$352 per square metre and fixed annual escalations of 3.0 per cent.

“Both acquisitions are consistent with IAP’s strategy of acquiring good quality industrial properties with strong tenant covenants and long lease terms and increase IAP’s exposure to the strongly performing industrial sector,” IAP CEO Graeme Katz said.

“IAP believes the Brisbane industrial market currently represents relative value, and the acquisitions complement IAP’s recent Brisbane industrial acquisitions in Brendale (completed in January 2021) and Pinkenba (completed in March 2021),” he concluded.

Irongate Group closed 0.55 per up to trade at $1.38 per share.