Saturday, September 09, 2006

Costa Logistics Inks $70 Million Sale Leaseback of Five Distribution Centers in Australia

Australian Financial Review reports that Melbourne's Costa Group has sold a 41,450 square metre portfolio of five warehouse distribution facilities located in NSW, Victoria, Western Australia and Tasmania. The buyer was Lend Lease-managed Australian Prime Property Fund Industrial (APPF) which reportedly paid approximately $70 million for the portfolio.

APPF was part of the joint venture that recently acquired the Woolworths logistics portfolio at a record low yield of 6.5 per cent. It is believed that the yield on the Costa portfolio was less than 7.0% reflecting the covenant being linked to a private company and the buildings being of lesser quality.

Buyers were reportedly asked to bid an initial rent given a set price of $70 million and 3 percent annual rent increases over an initial lease term of 15 years. Sphere: Related Content

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