James Thomson Editor

James Thomson is the editor of BRW. Previously he was editor and publisher of SmartCompany and a senior editor at Business Spectator. He writes regularly on Australia's wealthiest entrepreneurs and has deep expertise in small business and the mid market.

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Rich 200 property moguls hunt for bargains

Published 07 February 2013 01:03, Updated 04 February 2014 00:15

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Cashed-up property developers on the Rich 200 aren’t slowing down in their hunt for bargain property assets.

The latest to make a splash in the commercial property sector is veteran Sydney developer Bob Ell, who has emerged as the buyer of a 34-hectare site near Sydney’s Bankstown Airport, in the city’s south-west.

The industrial parcel was formerly owned by a joint venture between Mirvac and Leighton Holdings. Ell’s Leda Holdings bought it from the joint venture’s receivers for about $25 million.

While industrial land prices in that area fell by an estimated 30 per cent in the wake of the global financial crisis, demand is rising, with big buyers, including overseas investors and listed real estate companies, targeting the sector again.

That might be one reason Ell’s company has snaffled two properties in the space of a month. Before buying the Bankstown site, Leda swooped on an 11.5 hectare site at Caringbah in Sydney’s south for $34 million.

That site was bought from a manufacturing subsidiary of Johnson & Johnson and will be renamed Sutherland Shire Industrial Estate.

The demand for industrial property from these heavy hitters may seem a little odd given the apparent levels of confidence in the sector. The latest NAB Commercial Property Survey showed that industry players are expecting industry values to grow by just 1.5 per cent in 2013 and 2.8 per cent in 2014, with the sector weighed down by the poor outlook for manufacturing.

But the overriding rule in property is that location matters and Leda believes the quality space in the south-west of Sydney is at a premium.

“Land [available for purchase] in Sydney’s south-west and off that M5 [motorway] corridor is not plentiful,” a spokesman told BRW.

Bob Ell was valued at $1.14 billion on last year’s Rich 200. Leda’s portfolio is spread across the spectrum of commercial property. There’s an office tower at Milsons Point in Sydney, industrial parks in the city’s outer suburbs, the Morayfield Shopping Centre in Brisbane and a half share in the Tuggeranong Hyperdome in Canberra.

Ell has also been mentioned as the potential developer of a $200 million cruise ship terminal on the Gold Coast, but local opposition means the project remains on the back burner.

Ell isn’t the only rich-lister on the hunt for property bargains. In early January, retail magnate Brett Blundy (who was valued at $835 million on BRW’s 2012 Rich 200) paid $50.5 million for a homemaker centre at Jindalee, a Brisbane suburb.

It was the first Queensland acquisition by Blundy’s company, BB Retail Capital, and took his portfolio of bulky goods centres to an estimated $540 million.

As with the industrial property sector, the bulky goods sector is attracting big investors keen to secure good properties while prices are still low.

Aside from Blundy, investors including the Karedis family’s company and global giant Blackstone have bought bulky goods sites in the last 12 months.

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