Total Return Paid Since Inception
Indicative IRR (Internal Rate of Return) on Closure*
*Figures based on initial investor. The target IRR includes all distributions paid as well as the net amount (after payment of estimated costs and expenses and estimated liabilities of the Fund) which would be paid to Unitholders if the Assets were sold. Target returns are not promised nor guaranteed and are based upon a number of assumptions. Their achievement is subject to risks. Past performance is not a reliable indicator of future performance.
Overview
In 2022, Westbridge identified a key opportunity in Western Australia’s industrial sector, with historically low vacancy rates, limited new supply and rising demand creating favourable conditions for growth.
To capitalise on these conditions, we launched the Westbridge Industrial Total Return Fund. This Fund aimed to acquire prime industrial assets over a three-year period, generating income through existing tenancies while repositioning assets via leasing, refurbishment and strategic divestment to maximise capital gains. The target was to deliver a 12% internal rate of return (IRR) from a mix of income distributions and capital appreciation.
Following divestment of two of the Fund’s three assets in 2024, an initial investor with a $100,000 investment has now received $104,000 in returns from both monthly income and special distributions. With one remaining asset still held in the portfolio, the Fund is projected to exceed its initial targets, with a projected IRR of 14.5%* upon the final sale.
Fund Timeline
In acquiring assets for this Fund, our focus was on versatile and high-quality properties located in Perth’s core industrial precincts. While presenting potential for repositioning, these assets would also offer staggered lease expiries when blended together, providing the ability to work through each property while providing a monthly income stream from the existing tenancies.
2022
June 2022
First acquisition
The Fund was established with the acquisition of a modern office/warehouse facility at 133 Beringarra Avenue in Malaga. This asset was selected to offer a strong income stream for the initial period of the Fund, with a minimum of 2.5 years remaining on the lease to nationally-operated business and Bunnings supplier, Hobson Engineering. With the tenant likely to relocate at lease expiry, we saw an opportunity to reposition the asset over the medium-term to capitalise on market demand through re-leasing and/or strategic divestment.
December 2022
Second acquisition & lease renewal
We identified a second asset for the Fund – a highly visible warehouse facility in the premier industrial precinct of Welshpool. The asset was tenanted by Coates – a wholly-owned subsidiary of Seven Group Holdings Limited (ASX:SVW) – who were holding over from a previous lease. We saw immediate potential to capitalise on rental growth and low vacancy rates through a new agreement with the tenant. Our team were able to negotiate terms prior to settlement for Coates to renew their lease, including a capital works agreement, in exchange for a longer lease term at market rent.
December 2022
Final acquisition
We made the third and final acquisition for the Fund with the purchase of a cold storage facility at 3 & 5 Marchesi Street, Kewdale. At the time, the property was fully leased to ASX-listed tenant, Wide Open Agriculture (ASX:WOA), with a lease commitment to the end of March 2024. With the passing rent below market levels, this provided the opportunity to secure rental uplift through lease renewal or explore divestment options to capitalise on market demand.
March 2023
Welshpool revaluation & special distribution
Following finalisation of the lease renewal with Coates for a further 7-year term, the Welshpool asset was revalued at $12 million, achieving an immediate uplift from our purchase price of $9.8 million. With the increased valuation, we re-financed the asset, enabling our first special distribution of $1.2 million – circa $0.065 to investors.
2024
June
Kewdale sale & second special distribution
Following continued growth in the industrial sector, we secured and accepted an offer for sale on the Kewdale asset from a nearby owner-occupier. The sale price of $10.8m reflected a considerable 33% increase in value from the purchase price just 16 months prior, while also de-risking the uncertainty on the lease. The sale facilitated a second special distribution to investors of $0.40 per unit.
October
Malaga sale & third special distribution
Capturing high demand from owner-occupiers, we secured the second sale for the Fund with the divestment of 133 Beringarra Avenue, Malaga. The facility sold for $13.65 million, reflecting an increase of 36.5% on the purchase price ($10 million) over a two-year hold period, and supporting a further special distribution of $0.40 per unit to investors.
An initial investor with a $100,000 investment has now received $104,000 in returns, with remaining units in the Fund still valued at $0.27 per unit as at December 2024
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