11/07/2018 - 15:42

Lester to recycle capital in WA

11/07/2018 - 15:42

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Western Australia-based developer and investor Lester Group has ridden the wave of a strong east coast property market and is now seeking more opportunities closer to home.

Lester to recycle capital in WA
Russell Lester says the group will continue to be an active buyer in the Perth market in 2018. Photo: Gabriel Oliveira

Western Australia-based developer and investor Lester Group has ridden the wave of a strong east coast property market and is now seeking more opportunities closer to home. 

Earlier this month, the family-owned and operated business sold its 20 Williamson Road industrial property in Ingleburn, NSW, to national real estate group Dexus for $23.46 million.

Lester Group director Russell Lester said the offer from Dexus was one of more than 11 bids for the 2.5-hectare property, which features an 11,554 square metre building and achieved $10.26 million capital growth in less than four years, after the group bought the property in 2014 for $13.2 million.

The Williamson Road property is the second Lester Group syndicated property taken to market within the past year, and was part of a diversified property trust.

In October, the group sold an office building in Southbank, Victoria, for $42 million, having bought it in 2013 for $22 million.

“We certainly feel that Sydney and Melbourne have been strong markets and there’s been a good opportunity to take advantage of those and recycle the capital back to Perth, which we’re investing at much higher yields,” Mr Lester told Business News.

“While we continue to actively look at assets Australia-wide, at present WA appears to be offering the most compelling opportunities.”

In June, Lester Group purchased a facility in Forrestfield on Ashby Close, home to ASCO Transport and Logistics, for $20.5 million – its first WA investment in five years.

The 3.2ha property is fully leased for seven years and includes an 8,595sqm warehouse and 671sqm of office space, with further development potential. 

“Activity has picked up here locally and businesses are performing better; the vacancy risk has reduced, so that offers a better value proposition,” Mr Lester said.

“Tenants are more likely to stick around and pay the rent, whereas some years ago that risk was actually very high.”

The group has also recently eyed opportunities in Brisbane, purchasing a purpose-built cold storage facility on a total land area of 8,820sqm for $11.15 million.

The Brisbane property represents one of three east coast assets within the group’s property portfolio, which includes an office building in Macquarie Park and the Wetherill Park industrial precinct, both located in Sydney, with its several remaining properties in WA.

Outside of its syndication activities, Lester Group’s commercial property portfolio has a total value of more than $150 million.

Lester Group also has a substantial residential portfolio, comprising apartments and housing estates, all in WA.

“We’re shopping all over Australia for value,” Mr Lester said.

“We’ve been active sellers in Sydney and Melbourne and active buyers in Brisbane and Perth, and I think that strategy will continue.”

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