Westbridge acquisition sees key tenant commit to 10-year lease

17 February 2021

Westbridge Funds Management has purchased a strategic industrial land holding in Palmyra WA, adjacent to its existing facility (acquired in June 2021) and in doing so has secured the existing tenant, Sealanes for a 10-year lease term and created a framework for constructing an enlarged facility to meet Sealanes WA’s growing operation requirements.

• Westbridge Funds Management has purchased 4 Absolon Street, Palmyra – a former milk depot.
• The adjoining site at 2 Absolon Street – a temperature-controlled logistics facility, is already owned by Westbridge and leased to Sealanes.
• Sealanes has committed to lease the aggregated site, under an extended lease term for 10 years.

WA-based property funds manager, Westbridge Funds Management, has acquired the former milk depot located at 4 Absolon Street, Palmyra in an off-market sale.

The property adjoins 2 Absolon Street, already owned by Westbridge – and leased to Sealanes, a wholly owned subsidiary of Superior Food Services.

As a result of the acquisition, Sealanes has agreed to extend its lease term to 10 years and varied the lease terms to include the adjoining site.

The lease agreement provides a framework for Westbridge and Sealanes to expand the existing facility and develop the adjoining site, which will give Sealanes a facility that will meet its current and future operational requirements, having seen significant growth in recent years.

Mr Simon Worth, Head of Capital Transactions at Westbridge, said, “The strategic off-market purchase of 4 Absolon Street, Palmyra delivers significant benefits to investors in Westbridge’s Palmyra Property Fund.

“The purchase of 4 Absolon Street, Palmyra allowed us to negotiate an extension and variation to the existing lease with Sealanes to give our investors the surety of a 10-year lease term plus an increment increase in rent. In addition, the agglomerated site offers significant opportunities for development and long-term capital growth.”

2 Absolon Street is one of the largest land holdings in the Palmyra industrial precinct. It features a purpose-built cold storage and distribution facility of 9,035 square metres on an allotment of 20,251 square metres. The property was purchased by Westbridge in 2021 for $20.15 million.

The latest acquisition – 4 Absolon Street, comprises a 9,565 square metre allotment. The site will be redeveloped across two phases that will include construction of a new dry shed, followed by new warehousing and office space.

The facility will now have a combined site area of just under 3 hectares and will be one of the largest land holdings in Palmyra benefiting from exposure to Leach Highway, a major arterial road with direct links to Fremantle Port and Perth Airport. The combined sites are now valued significantly higher than their individual purchase prices, delivering investors with a 40% uplift in equity within the first 6 months of ownership.

Mr Damian Collins, Chairman of Westbridge Funds Management noted, “The acquisition of 4 Absolon Street, Palmyra is a clear demonstration of Westbridge’s commitment to add value for our investors and explore opportunities to collaborate with our tenants that encourage long term tenure while maximising the full potential of an asset.”

Westbridge’s Palmyra Property Fund is fully subscribed; however investors can register their interest in future opportunities at the form below.