ADC completes $18m acquisition

Perth-based property group Australian Development Capital (ADC_) has acquired the Belmont headquarters of international rail solutions group Hitachi Rail in an $18 million transaction.

The 1.3 hectare site, located at 93 Francisco Street in Perth, was redeveloped in 2007 as four contiguous tenancies and comprises a two-level CBD-fringe office and warehouse space.

ADC said it acquired the property with a five-and-a-half year WALE, with net passing income providing a 7.5 per cent yield that will translate to 9.5 per cent distributions to investors.

The sale was brokered by industrial specialist Matthew Lyford from Lyfords and Vincent Siciliano from LJ Hooker Commercial.

Commenting on the acquisition was ADC director Rod Hamersley.

“The majority of our focus in recent years has been acquisition of properties with holding income that can be either redeveloped or repositioned in the medium term,” he said.

“However, we have recently expanded our targets to meet the requirements our investors and are looking actively for high calibre investment properties with strong tenancy profiles and yields.”

Mr Hamersley said ADC was also attracted to the high calibre nature of the buildings, their flexibility and the close proximity to the CBD.

“In recent years we have seen local and federal government sensibly commit to assisting the gentrification of the Belmont Business Park Precinct, spending over $12 million to improve streetscapes, increase public transport infrastructure, and add additional parking,” he said.

“All of this work is seeing an aged industrial area become a modern mixed business precinct.”

More than 80 per cent of the building income is derived from major tenant Hitachi Rail – a subsidiary of Hitachi – which is listed on the Tokyo Stock Exchange and has a market capitalisation of around $A50 billion, ADC said.

The remainder of the building space is leased to JSA – a junior sports academy with a multi-use sports facility that includes a gym, consulting rooms, an indoor pool and a café.