CASE STUDY

LF Beverley Trust

113 Ledger Road, Beverley, SA

Origination

  • Off-market purchase for $14.225m (Jan-23).
  • High quality office/warehouse of 8,000 sqm.
  • 1.6 hectare land holding in inner-west logistics location, close to CBD, airport and key transport routes.
  • Short WALE (1.6 years), with passing rent below market level providing an opportunity for near-term positive rental reversion.
  • Acquisition pricing well below the equivalent replacement cost.
  • Independent valuation of the property 7.2% ($1.025m) higher than purchase price.

Strategy

  • Realise the opportunity for rental growth at near-term lease expiry.
  • Exploit shortage of good quality logistics space in the location to drive rent and value.
  • Reset leases with minimal downtime.
  • Improve capital value through rental uplift and increasing WALE.

Execution

  • Targeted leasing campaign to attract new tenants and leverage competitive tension in negotiations with existing tenants.
  • Direct negotiation with existing tenants to remain at the property.
  • Undertook CAPEX to improve the property and increase potential rental.

Result

  • Executed new five-year leases with two existing tenants, achieving rents 22% above passing.
  • Zero vacancy downtime, and no further capital investment required for upgrade works.
  • No lease incentives paid.
  • Property valued in Oct 2024 at $18.7m – 31% uplift on the acquisition price.