The Trilogy Industrial Property Trust’s acquisition, enhancement and successful divestment of 33-41 Diesel Drive, Paget in Mackay represents a textbook example of Trilogy Funds’ active asset management strategy. Across an eight-year holding period, Trilogy Funds identified unrealised potential, partnered with a high-quality tenant, executed targeted improvements and ultimately delivered a strong capital outcome for the portfolio.

Strategic acquisition

In April 2018, Trilogy Funds acquired the Diesel Drive asset for $7.25 million on behalf of investors in the Trilogy Industrial Property Trust (Trust). At the time of the acquisition, the asset was already a substantial industrial facility located in Mackay’s key heavy industrial precinct of Paget, an area servicing the Bowen Basin mining sector and known for strong tenant demand.

The 9,813 sqm site included a modern, high-clearance 1,802 sqm workshop with significant cranage, a 350 sqm two-level office and extensive awnings.

The asset was purpose-built in 2014 for Independent Mining Services (IMS), a strong, regionally embedded tenant that provides fabrication and repair services to the mining sector.

Trilogy Funds’ Head of Direct Property, Laurence Parisi, highlighted the portfolio appeal of the asset.

“There is a lot of value to be found in seeking assets located in areas that can bring ‘capital-city’ demand and income reliability, but without capital city pricing – this has flow on impacts to the yields that are possible for the portfolio. The initial passing yield of 10.08% p.a. easily made our screening criteria at the time, and was reflective of the asset’s location within a high-demand industrial precinct.”

According to Parisi, structured uplift in rental terms not only enhanced the asset’s income stability, but also supported Trilogy Funds’ broader strategy of acquiring properties with built-in rental escalation mechanisms to drive sustainable total returns within the broader Trust portfolio.

“There was a strong lease covenant in place with a high-quality tenant. The long-term lease to IMS included pre-agreed annual rental increases, providing the portfolio with clear and reliable income growth from day one.”

“From this initial platform of covenant strength and reliable income, we could, over time explore the possibilities for value-add initiatives.”

Value-enhancing site expansion

Shortly after acquisition, Trilogy Funds worked closely with IMS to deliver a multi-million-dollar expansion program tailored to the tenant’s operational requirements. These improvements represented a core component of Trilogy Funds’ active asset management approach.

The expansion saw the construction of a 900 sqm workshop to house 10 electric jib cranes and two Eilbeck cranes. Additionally, a 300 sqm awning was attached to the existing workshop, allowing IMS to load and unload freight undercover and away from possible weather disruption. Further improvements across the site were also implemented, including the addition of a 470 sqm concrete hardstand to improve inter-building operational flow.

The benefits of the upgrades, according to Parisi, went beyond the asset’s spec sheet.

“These upgrades not only represented a significant increase to the gross lettable area of the site, but materially enhanced site functionality, efficiency and tenant satisfaction,” Mr Parisi said.

“As a direct consequence of these upgrades, Trilogy Funds strengthened its relationship with IMS, securing a lease extension with improved rental outcomes and long-term occupancy. The renegotiated lease, which is not due to expire until July 2031, includes annual rental uplifts of the greater of 3.00% or CPI.”

According to Parisi, it all forms part of a very deliberate, and comprehensive approach to industrial property investing.

“The Diesel Drive asset is a great example of what we can achieve – identifying and realising value in a property with significant room for improvement. Executing, delivering for the tenant, building better relationships, stronger lease terms and ultimately, a multi-frontier approach to driving uplift in the asset’s value.”

In April 2025, an independent, external valuation was undertaken, which adopted a market value of $14.4 million.

“The uplift in the April valuation reflects more than just asset upgrades, it’s the result of Trilogy Funds’ full asset strategy – superior asset selection, acquiring at the right yield and timing, executing targeted upgrades and expansion works, and maintaining strong tenant relationships.”

2026 sale for $15.1 million

Following inbound market interest, the Trust settled the sale of the Diesel Drive asset for $15.1 million on 30 March 2026. The sale exceeds the most recent external valuation and is a significant uplift on the original purchase price.

“This sale reflects Trilogy Funds’ focus on providing investors with access to competitive monthly income and the opportunity for capital growth over the long term,” Mr Parisi said.

The sale concludes the portfolio lifecycle of the Diesel Drive asset. With a purchase price of $7.25 million, thoughtfully delivered upgrades, a long-term tenant partnership and a $15.1 million exit, the asset has delivered both stable income and compelling capital growth for the portfolio.

The asset serves as a prime example of how the Trust executes its asset management strategy, from smart acquisition and collaborative expansion, through to disciplined asset recycling, value uplift and, ultimately value realisation.

About the Trilogy Industrial Property Trust

The award-winning¹ Trilogy Industrial Property Trust aims to deliver regular monthly income and long-term capital growth potential through strategic investment in industrial real estate assets. Managed by Trilogy Funds, the Trust focuses on acquiring and managing well-located industrial assets across Australia, targeting properties with strong tenant covenants and long lease terms.

The Trust’s portfolio includes warehouses, logistics hubs and light industrial facilities, sectors that have shown resilience and growth amid evolving supply chain demand and e-commerce uptake. Trilogy Funds’ experienced management team adds further value through active asset management and strategic acquisitions.

Unitholders benefit from monthly distributions, derived primarily from net rental income, with tenants often locked into long-term leases that include annual rent increases. The Trust also offers tax-effective income, with potential tax-deferred components due to depreciation and other non-cash deductions.

The Trust demonstrates the way in which unlisted property funds can offer a compelling blend of income, growth potential and diversification, particularly for investors seeking exposure to Australia’s industrial property sector without the complexities of direct ownership.

1.2023 Financial Newswire / SQM Research Fund Manager of the Year Awards – Direct Property category.

This article is issued by Trilogy Funds Management Limited ABN 59 080 383 679 AFSL 261425 (Trilogy Funds) as responsible entity for the Trilogy Industrial Property Trust ARSN 623 096 944. Application for investment can only be made on the application form accompanying the Product Disclosure Statement (PDS) dated 3 March 2025. The PDS and Target Market Determination (TMD) dated 11 September 2023 for the Trilogy Industrial Property Trust ARSN 623 096 944 are available at www.trilogyfunds.com.au. The PDS contains full details of the terms and conditions of investment and should be read in full, particularly the risk section, prior to lodging any application or making a further investment. All investments, including those with Trilogy Funds, involve risk which can lead to no or lower than expected returns, or a loss of part or all of your capital. Trilogy Funds is licensed to provide only general financial product advice about its products and therefore recommends you seek personal advice on the suitability of this investment to your objectives, financial situation and needs from a licensed financial adviser. Investments with Trilogy Funds are not bank deposits and are not government guaranteed. Past performance is no indicator of future performance.