Fridge sale: Australian cold-storage facility sold for $67m
A massive refrigerating unit in Sydney's northwest has sold for a whopping $66.5m, crowning it Australia's priciest fridge sale.
The huge refrigerator facility, spanning more than 10,000 sqm, is located at 1-3 Zeleny Rd in Michenbury.
First hitting the market in February 2024 with ambitious price hopes over $75m, the unit has finally changed hands amid a boom in the food logistics industry.
The cold-storage warehouse was snapped up by investment company Irongate Group for an almost $10m discount off the initial price expectations.
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The facility has been sold with the key advantage of a long-term tenant already secured.
Minus 1 Refrigerated Transport, a market leader in cold storage transportation, will commence the lease once building is completed by design and construction company Spaceframe.
The property was sold by The Colliers Industrial and Logistics Capital Markets team of Gavin Bishop and Sean Thomson, who sold the property exclusively on behalf of Barber Property Group.
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The cold storage sector is currently valued at approximately $5.5 billion in Australia, according to Colliers, who claim there is growth potential and limited available stock, accounting for 2-3 per cent of total industrial supply.
Mr Bishop noted that as interest rates began to fall and further cuts were expected, more investors were using a 'fund-through' transaction, meaning they were paying for assets during their construction phase.
'We are experiencing heightened demand from both domestic and international investors for core industrial product within Sydney,' he said.
Mr Thomson said investor demand for cold storage facilities in Australia continued to grow
'(This is) driven by structural tailwinds in food logistics, pharmaceuticals, and e-commerce grocery delivery,' he said.
Nationally, the vacancy rate for the broader industrial market currently measures 2.9 per cent, according to Colliers.
Cold storage asset vacancies were closer to zero with only a handful of facilities available for lease over the next 12 months.
'As a niche subsector within industrial real estate, cold storage assets offer strong rental growth potential and are often underpinned by long-term leases to high-credit tenants, making them increasingly attractive to institutional capital seeking defensive income and inflation protection,' Mr Thomson said.
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