SC Capital Buys Queensland Industrial Site for Opportunistic Fund

SC Capital Partners has added to its Australian portfolio with the purchase of an industrial site between Brisbane and the Gold Coast for A$23.2 million ($16.6 million) on behalf of its Asia opportunistic fund.

Located in Stapylton within Queensland’s Yatala Enterprise Area, the property consists of a 3.7 hectare (9.1 acre) land parcel with an existing building of 8,600 square metres (92,570 square feet) that is leased through 2026, the Singapore-based private equity firm said Thursday in a release.

SC Capital and its Melbourne-based operating partner, KordaMentha Real Estate, plan to add value to the site at 10 Elliot Drive by developing 1.6 hectares of unimproved land in what will be the 24th investment to date by SC’s Real Estate Capital Asia Partners V fund, which reached a final closing of $850 million in 2019.

“Stapylton Queensland is an excellent addition to RECAP V’s portfolio and is consistent with its strategy of acquiring well-located assets, which fit the fund’s thematic approach,” said SC Capital chairman and founder Suchad Chiaranussati.

Zone of Interest

The Yatala Enterprise Area is the largest industrial zone in the Gold Coast region, comprising 3,305 hectares of land in the southeast corner of Queensland state. The location offers access to a key arterial road, the M1 Pacific Motorway, as well as to Brisbane’s port and international airport.

SC Capital purchased the Stapylton asset at a passing yield of 5.45 percent, said Nick Crockett, executive director of KordaMentha Real Estate, which will serve as investment manager for the property.

The Queensland acquisition is RECAP V’s 11th industrial deal after previous transactions in China, Japan and South Korea, SC Capital said. Industrial, including logistics, is one of the four main investment themes of the fund’s pan-Asian strategy, alongside senior living, data centres and special situations.

Just last week, SC Capital announced the acquisition of a portfolio of real estate non-performing loans in Japan on behalf of RECAP V for an undisclosed amount. Sold by a regional bank, the portfolio is collateralised mainly by residential assets located in and around Osaka.

The investment furthered RECAP V’s strategy within the Asia Pacific real estate credit market after recently executing two other credit deals in the region.

“We’ve been seeing an increasing number of opportunities in the real estate debt segment across the region, especially due to the volatility brought by COVID,” Suchad said. “As value investors, we will be looking at various forms of credit, including non-performing loans and mezzanine loans.”

Australian Excursions

Founded in 2004, SC Capital Partners has over $7.4 billion in assets under management across five discretionary closed-end opportunistic funds, one discretionary core/core-plus fund and two listed REITs.

The firm’s Australian acquisitions under its RECAP series have included three Sydney shopping centres purchased alongside Fortius Funds Management for A$174.5 million ($118 million) from Frasers Property Australia and Sekisui House; and the former St Kilda Road police complex in Melbourne for A$107 million ($73 million). Both deals were announced in 2019.

In 2020, SC Capital sold the 59 Goulburn Street office tower in Sydney’s CBD to Chinese developer Poly for A$270 million ($182 million) on behalf of RECAP funds, flipping the property at a mark-up of almost 71 percent just over two and a half years after acquiring the asset.

Australia has proved a hotbed for industrial deals this year, with Hong Kong-listed ESR teaming up with Singapore sovereign wealth fund GIC in April to purchase the 1.4 billion square metre Milestone logistics portfolio from Blackstone for $2.9 billion.

In October, local developer Logos revealed that it was leading a consortium to buy a 13.8 hectare industrial site near Sydney’s airport from Qantas Airways for A$802 million ($594 million). Just three months earlier, Logos had announced its acquisition of the 243 hectare Moorebank Logistics Park in Sydney for A$1.7 billion, with backing from AustralianSuper, Ivanhoe Cambridge, NSW Treasury Corporation and France’s AXA IM Alts.