Australia Post Marketing Seven Warehouses Under $276M Sale-and-Leaseback

Australia Post is marketing a set of seven logistics facilities in some of the country’s largest industrial hubs as the government-owned company grapples with the decline of its core postal business.

The letter and parcel carrier is aiming to raise A$400 million ($276 million) from the warehouses in western Sydney, Adelaide and in southern Queensland, with the seven-asset portfolio currently generating A$19 million in income. 

“We’re reshaping our property portfolio by repurposing or selling sites where capital can be better invested to expand capacity, improve efficiency and enhance service offerings, allowing us to compete in the rapidly evolving eCommerce landscape,” an Australia Post spokesperson told Mingtiandi. 

Through three separate campaigns Australia Post has engaged CBRE, Colliers and Leedwell Property to manage an expression of interest campaign (EOI) for the properties, which are being offered under a sale and lease-back arrangement where Australia Post while employing proceeds to upgrade its ecommerce business amid surging demand.

Multi-City Exposure

Based on the asking price and current income from the 87,161 square metre (938,192 square foot) set of warehouses, which is the equivalent of A$4,589 per square metre of gross lettable area at the asking price. Expressions of interest for all of the properties are due by late April.

The portfolio is available both as set, or as individual assets, with the offering divided into three geographic clusters headlined by the largest of the properties, the Sydney Gateway Facility at 2A Factory Street in Granville.

Located in an industrial park in inner west Sydney close to a rail hub, expressways and about 24 kilometres (15 miles) from the city’s airport the property has a gross lettable area of 27,692 square metres, with a six-year leaseback to Australia Post.

The property currently generates net annual income of $6.9 million with yearly increases of 3.5 percent, according to a post on LinkedIn from Chris O’Brien, executive director APAC capital markets, industrial and logistics, at CBRE. Colliers has also been retained for the sale, with expressions of interest due by 30 April.

In booming southern Queensland, three sites are available either individually or as a portfolio, covering a combined GLA of 37,090 sqm and overall area of 112,937 square metres with net income of $8.2 million. Occupying a combined site area of 112,937 square metres, the property leases also include 3.5 percent annual rent hikes with a seven-year leaseback commitment.

A pair of suburban Brisbane properties are located in Darra and in Northgate adjacent to the city’s airport, where more than A$5-billion is being invested in upgrades for the 2032 Olympics. The final site is in Bundall on the Gold Coast south of the city. CBRE is handling the Queensland sale by itself, according to another LinkedIn post from O’Brien, with expression of interest due by 28 April.

In Adelaide, Australia Post is marketing three assets in industrial areas in Wingfield and Mile End South, with an overall GLA of 22,379 square metres, combined landholding of 78,246 square metres and net income of A$3.9 million with fixed increases each year, according to a separate LinkedIn post from O’Brien last month. 

The Adelaide properties were jointly marketed with local brokerage Leedwell Property with these properties carrying shorter three-year leasebacks. Expressions of interest were due on 26 March.

Tight Yield Linked to Tenancy

The offering represents a net initial yield of 4.76 percent, with brokers involved in the deal pointing to the quality of the tenancy and annual rent increases of 3.5 increase in the Sydney and Queensland assets as supporting a yield which is nearly 100 basis points tighter than the 5.70 percent national prime average reported in a recent Colliers industrial report. 

While large portfolio deals have been rare in recent years, Centuria Industrial REIT teamed with North American fund manager BGO to acquire a set of three Sydney industrial properties from Goodman Group for A$201 million, with Centuria Industrial REIT having reported a portfolio-wide weighted average capitalisation rate of 5.83 percent in early 2025. 

Late last year Goodman Group sold a pair of Sydney warehouses to local fund manager Aliro Group for A$438 million, according to a Colliers report, with that transaction reportedly representing a 5.25 percent yield. 

Tough Times for the Postman

Like postal services the world over facing an ever-dwindling trickle of letters and postcards, Australia Post has been offloading assets to go up the value chain and focus on parcels and broader eCommerce. The Australian institution controversially sold the heritage-listed Sydney GPO for around A$150 million to Singapore’s Far East Organisation and Hong Kong-based Sino Land in 2017.

Australia Post is also investing in upgrading its parcel business and developing more than 10 new sites including a A$500-million Parcel Super Hub in Adelaide, the capital of South Australia, the spokesperson said.

Further asset sales were flagged in the company’s half-year results announcement in February, when it said it would adjust its portfolio according to its resource needs.

Australia Post said “surging eCommerce demand” generated a 5.1 percent increase in parcel volumes, compared with a year earlier, while letter volumes fell nearly 12 percent.