Gaw Capital Forms $151M Fund Targeting Aussie Industrial Assets

With property markets in Melbourne and Sydney looking as if they have peaked, Gaw Capital decided to go in another direction. The Hong Kong-based firm is teaming up with Abacus Property Group for an A$200 million ($151.5 million) opportunistic investment fund targeting industrial assets in major cities along Australia’s east coast.

Although only announced this month, the new investment vehicle has already purchased its first asset — a 44,406 square metre (145,689 square foot) office and warehouse facility in the Melbourne suburb of Altona. A group of Melbourne-based private investors sold the industrial site to the fund for A$30 million ($22.7 million). The facility is currently leased to Fonterra Brands, but Gaw and Abacus pointed out that the dairy company is expected to vacate the facility next year.

Danny Clark, head of commercial sales in Victoria state for property agency Knight Frank noted that more than A$110 million ($83.4 million) in real estate transactions have taken place in Melbourne’s industrial suburbs in recent months as local councils have aggressively rezoned the land to allow for residential development.

Earlier this year, Australia-based real estate investment company Mirvac acquired a 32,700 square metre (107,283 square foot) industrial site in Altona from Australian Post for A$25 million ($18.9 million). The facility had a tenant on a short-term lease.

A second site in the Sydney suburb of Chullora that features office and warehouse space was also acquired by the fund for A$35 million ($26.5 million). The property is currently unoccupied and is surrounded by residential properties.

Gaw revealed that it will provide 90 percent of the equity with Abacus covering the remaining ten percent as well as providing local property and asset management. Gaw Capital President and Managing Principal Kenny Gaw stated there will be more acquisition opportunities in the near future and added the firm believes this is a long-term investment program.