Growthpoint Properties Australia has agreed to sell its Woolworths distribution centre at 20 Colquhoun Road in Perth for $267.7 million, significantly more than the $101.6 million valuation when the company acquired the leasehold property in 2009. The transaction marks a capital recycling move demonstrating the value created through active asset management over more than 15 years.
Since acquisition, Growthpoint has substantially expanded the distribution centre, completing a 15,000 square metre expansion shortly after acquiring the asset and commencing a further 10,700 square metre expansion currently underway. The buyer, Hesperia, is acquiring a materially larger and more productive asset than what was originally in Growthpoint’s portfolio.
The financial metrics underpin management’s rationale for the sale. Growthpoint expects the divestment to deliver an unlevered property internal rate of return of approximately 12 percent, validating that holding the asset has created genuine shareholder value. This represents a gross return of 2.6 times the 2009 valuation, meaning Growthpoint has more than doubled its capital while generating material operational income over the 17-year holding period.
The transaction also addresses balance sheet management. Net proceeds from the sale will reduce Growthpoint’s pro forma gearing by approximately 4 percent, improving financial flexibility at a time when interest rates remain elevated relative to the low-rate environment in which the asset was acquired. This deleveraging provides headroom for future capital deployment and builds a buffer in any market stress.
Several conditions must be satisfied before settlement occurs. Completion of the current expansion project is required, along with Foreign Investment Review Board approval, which is standard when property is acquired by foreign buyers. Settlement is expected in early 2027, providing certainty around timing but also a period in which market conditions or expansion costs could shift the transaction dynamics. Investors should monitor the expansion project progress and FIRB’s assessment, as delays could push settlement into the latter part of 2027 or beyond.
The sale reflects Growthpoint’s stated strategy of disciplined capital recycling and efficient capital management. Rather than hold mature assets indefinitely, the company has exited at what management believes is an optimal point in the cycle. For Growthpoint shareholders, the transaction validates the value creation capability of the management team and presents a capital base that can be redeployed toward new opportunities or distributed depending on strategic priorities. This announcement has been flagged as price sensitive and material by the ASX.
View the full ASX announcement (PDF)
About Growthpoint Properties Australia Limited (ASX: GOZ)
Growthpoint Properties Australia Limited is an Australian real estate investment trust that owns and operates a diversified portfolio of office and industrial properties across Australia. The company also provides funds management services for third-party investors, managing office, industrial, and retail assets. Listed on the Australian Securities Exchange and a constituent of the S&P/ASX 200 index, it focuses on high-quality modern properties in the Australian market.
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