Desane Group Holdings has secured a lease extension with Brisbane City Council for its Wacol industrial property, guaranteeing $4.5 million in rental income through to 2030. This deal underscores confidence in Desane’s strategic positioning in Brisbane’s industrial market.
- Lease extension signed with Brisbane City Council until June 2030
- Rental income of approximately $4.5 million secured over the lease term
- Property located at 16 Industrial Avenue, Wacol, a key industrial hub near Brisbane CBD
- Desane plans future industrial warehouse development pending construction cost stability
- Lease extension reinforces Desane’s stable income stream and investment strategy
Lease Extension Secures Long-Term Income
Desane Group Holdings Limited (ASX: DGH) has announced a significant lease extension with Brisbane City Council for its industrial property at 16 Industrial Avenue, Wacol. The lease now runs through to 30 June 2030, providing Desane with a guaranteed rental income of approximately $4.5 million over the extended term.
This agreement not only secures a stable revenue stream but also signals Brisbane City Council’s confidence in both the asset and Desane’s management strategy. As the largest local government tenant in Australia, Brisbane Council’s commitment to this location underscores the property’s strategic importance within the industrial precinct.
Strategic Location and Tenant Profile
Wacol, situated just 20 kilometres southwest of Brisbane’s CBD, is a core industrial suburb with excellent access to major transport arteries such as the Ipswich and Logan Motorways. The leased facility currently houses Brisbane Council’s fleet vehicle maintenance division, reflecting a specialized use that aligns well with the industrial nature of the site.
Desane CEO Rick Montrone highlighted the lease extension as a vote of confidence, stating it provides a "significant and stable income stream for the years ahead." This stability is particularly valuable in the current market environment, where long-term leases with government tenants are highly prized for their reliability.
Future Development Potential
Beyond the lease extension, Desane holds a modified development consent for an additional 3,250 square metres of industrial warehouse space on approximately 8,000 square metres of land adjacent to the existing facility. The company plans to tender this project once construction prices stabilize relative to rental yields, indicating a cautious but optimistic approach to expansion.
This potential development could enhance the site’s value and income-generating capacity, positioning Desane to capitalize on ongoing demand for industrial space in the Brisbane region.
Implications for Investors
For investors, the lease extension represents a solid underpinning of Desane’s income profile, reducing risk through a long-term government tenant commitment. It also reinforces the company’s strategic focus on industrial property assets in growth corridors, which remain attractive amid broader economic shifts favoring logistics and warehousing.
While the development project remains contingent on market conditions, the lease extension itself provides immediate clarity and confidence in Desane’s operational outlook.
Bottom Line?
Desane’s extended lease with Brisbane City Council cements a reliable income base while setting the stage for future industrial expansion.
Questions in the middle?
- When will Desane proceed with the planned warehouse development given current construction cost volatility?
- How might changes in government tenancy or policy impact the long-term lease arrangement?
- What are the broader market trends in Brisbane’s industrial property sector that could influence Desane’s growth?