Multi-billion dollar investor Barings backs Perth’s industrial market after completing first development

Multibillion-dollar global investment firm Barings — with US$421 billion in assets under management across the globe — has talked up Perth’s appeal as an industrial property investment destination after completing its first development. Barings made its maiden foray into the Perth industrial market in late 2022, when it bought 4.4ha of land in Hazelmere for $31.5 million. It built a 15,590sqm industrial facility on it, despite not having a tenant in mind, marking its first-ever development in WA. The decision has paid off with 100 per cent of the property now under lease following a deal last week, negotiated by Cushman and Wakefield. The global giant’s deep pockets would be a welcome addition to Perth’s industrial property market. Project director at Barings, Stephen O’Connor, said the company was drawn to Perth for its strong leasing market, high migration rates and dominant mining sector. He said Barings recognised the ongoing demand for industrial space, driven by sectors like e-commerce, logistics and mining. “We’ve got some really good conviction in the Perth leasing market at the moment,” Mr Fife said. “This came off the back of a lot of research we’ve done, not just into the deals recently completed in Perth but also the rate of economic growth and migration into the city.” Cushman and Wakefield’s Andrew Fife — senior director of brokerage logistics and industrial — leased 9050sqm section of the facility to Bluestar Global Logistics in a 12-year lease deal. He called it “one of the highest-grade industrial facilities ever to be built in WA”, noting the ceiling height was a drawcard for his client. “Initially we were targeting buildings of between 10,000sqm to 12,000sqm for the tenant to try and replicate their current footprint in WA,” he said. “But given the warehouse design and specifically the height of the building, which provided a 14.6m high clearance, it allowed Bluestar the opportunity to take a more efficient footprint and utilise this cubic storage capacity to their advantage.” JLL and Colliers were the exclusive listing agents on the deal. The remaining 6540sqm of the facility is also under contract, which means the entire development is now fully leased. Barings followed up on the land purchase in December last year with the $74m acquisition of Joondalup Square. Recent research by the Real Estate Institute of WA shows Perth’s industrial market — along with retail — enjoyed a stellar run last year. Both recorded a 15.1 per cent swing in their median sale price per square metre, ahead of the office sector, which had more moderate growth of only 7.6 per cent. The annual median sale price per square metre for land in the Perth industrial market was $2605 in late December, which was up 15.1 per cent compared with a year ago. Sales were down 11 per cent, with 1016 industrial sales in the Greater Perth area last year compared with the previous year. It was led by 270 sales in the south-east sub-region. Price growth was highest in the north-west sub-region, at $2857 per square metre. But REIWA had sounded a warning that investors had more recently reported higher prices and reduced yields in the industrial market, prompting them to turn their attention to other markets, such as retail.