nvestment house and non-bank lender Wingate is ramping up its direct investments in commercial property after buying a service station in Port Melbourne for $32.12 million.

The Westgate Freeway Service Centre at 62 Cook Street – beneath the West Gate Bridge – was acquired from a private investor on a yield 4.8 per cent.

With the investment 55 per cent geared, Wingate expected to deliver a 7 per cent annual distribution to investors and a nine per cent total return.

Anchored by a Shell Service Station and Coles Express convenience store, the large site is also home to Hungry Jacks and Red Rooster fast-food outlets.

It was originally developed by Rich Listers Andrew and Michael Buxton’s MAB Corp, which sold it soon after completion for $22.5 million in August 2016 on a 5.5 per cent yield. At the time it was the largest sale of a petrol station in Australia for more than 10 years.

Chris Jones of Dawkins Occhiuto negotiated the sale to Wingate.

The acquisition anchors Wingate’s new direct property platform, set up to co-invest in commercial property alongside the group’s more than 1600 investors.

“Wingate Direct Property has been established to focus on sourcing and acquiring ‘core plus’ investment opportunities, where we can increase underlying value through active management of the property,” said the firm’s head of direct property, Daniel Farley.

Mr Farley joined Wingate in October last year to grow its direct property business after a decade at Sydney-based fund manager EG.

“Port Melbourne is the first of two investments we are completing this month – we are seeing strong demand for these types of quality assets in an environment where many are searching for yield,” he said.

The second investment will be the $39.4 million related-party acquisition of a five-level office building in Moorabbin, in the city’s south-east.

Wingate acquired the property for $16.65 million with Align Property Partners last year as part of value-add refurbishment play.

Mr Farley said the office building was 75 per cent leased and expected to deliver about a 6 per distribution and 9 per cent total return.

Both assets will be held in special-purpose vehicles ahead of the potential establishment of a funds management business further down the track.

Mr Farley said the focus was primarily on office and industrial property as well as “opportunistic” retail investments priced between $20 and $100 million.

In another equity investment, Wingate last month partnered with the Scalzo family’s Perri Projects on the development of a $100 million last-mile logistics hub in West Melbourne.

The project will transform a 115-year-old flour mill complex into 14,000 square metres of warehouse, showroom and creative office space.

Mark Harrison, managing director of Wingate Property, said the addition of the Port Melbourne property was the latest in a series of equity investments in 2021.

While we have had some recent activity in Melbourne, including the logistics hub in West Melbourne and an office building in Moorabbin (bought in 2020 for $16.65 million) the Wingate pipeline is as strong as it has ever been in a national sense with further investments slated in NSW, Queensland and WA,” he said.

Amid the hunt for income-producing investments, other non-banks have also turned their focus to equity opportunities including MaxCap and Qualitas.

Extracted in full from: Wingate targets 7pc return for service station complex (afr.com)

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