What we look for in an industrial property
When thinking about industrial property, people often picture a giant factory or warehouse in the middle of nowhere.
While warehouses, fulfilment and distribution centres are still a significant driver of the industrial property sector, technological advancements over the last century have given rise to specialised assets like manufacturing and research and development facilities, as well as cold storage and data centres.
At Trilogy Funds, we employ a yield-for-growth approach to building the Trilogy Industrial Property Trust’s (Trust) portfolio. In essence, we look for strength and stability in rental income, while also seeking modest enhancement of capital values, particularly through tenant-led expansion.
Trilogy Industrial Property Trust portfolio overview (as at 28 February 2026)
How does Trilogy Funds identify a high-quality industrial property?
Leveraging the experience of our property team, Trilogy Funds looks at a number of factors when weighing up a potential acquisition.
Income
Investors in the Trust are paid monthly distributions primarily via the rental income paid by tenants. As such, to ensure the strongest investor income possible, we assess the strength of the tenant, terms of the lease, relative bargaining power of the tenant given the location, the ability to re-let the asset to an alternative tenant and the asset replacement cost.
The tenant
At Trilogy Funds, we assess tenant strength using both qualitative and quantitative measures. We prioritise blue chip tenants in sectors with strong demand drivers and those with established brands and clear competitive advantages. Tenants within the Trust include Quiksilver, Bega, Reece and Tempur. Not all our tenants have instantly recognisable names. Modern Star, for instance, is a market leader in the education supplies industry, and has established its position in that industry over a 70 year history. That’s the kind of pedigree that really interests us in a tenant.
The lease
Lease terms vary across properties and can be influenced by factors such as location and the quality of the asset. When acquiring an asset, we favour longer lease terms, as it provides a longer runway before renegotiating a new lease or seeking a new tenant is required.
The Trust seeks a medium term (4- 5 years) Weighted Average Lease Expiry at portfolio level, with staggered expiry dates to reduce the risk of multiple tenancy agreements ending at the same time. So, when considering a new acquisition, we’re not simply looking for a long-dated lease expiry, we’re considering how that lease fits in the context of our broader portfolio. Does it complement the leases currently in the portfolio? Does it reduce lease expiry risk? Does it make us particularly exposed to lease expiry at a particular point in the future? These are the kinds of considerations made.
Location
Location factors such as access to major transport (roads, airports, ports) play an important role, even more so than other property sectors such as residential. For industrial property, the movement of inventory, products, parts and supplies is critical for the tenants of these properties, as is access for staff, customers and suppliers.
Trilogy Funds also considers a number of other factors when conducting due diligence on a property’s location.
The availability of comparable space (or land for new supply) is a key consideration. Locations with limited nearby alternatives reduce tenant relocation risk and can support occupancy stability over the lease term.
Stock in tightly held locations is also more attractive than stock in more loosely held locations. This is because the tightly held nature of a location puts a constraint on future supply, thus favourably influencing the balance of bargaining power between tenant and landlord.
Re-letting the asset
While we aim to renew leases, this is not always possible. That’s why we consider our ability to re-let an asset when conducting due diligence.
Purpose-built and highly tailored assets are typically harder to re-let without significant capital expenditure in the form of redevelopments or extensive leasing campaigns. To appeal to a broader range of tenants, we target properties that require limited refurbishments.
Diversification
When assessing a potential acquisition, we consider how it would contribute to the portfolio’s diversification. We’ve discussed above, the need to diversify lease expiries.
In addition to this, geographic diversification is important. The fortunes of a particular region can change over time for the better or for the worse. Holding too many assets in a single location can expose the portfolio to greater risk in this regard.
Similarly, aiming to have a diverse tenant base, in terms of the industries they operate in, helps manage risk. A portfolio of industrial assets, occupied only by mining companies for example, would enter risky territory if there was a major dip in the mining sector.
A diversified portfolio helps spread exposure across different markets, industries and lease expiry profiles, reducing the impact of any single asset, tenant group, industry or location on overall performance.
Tenant-led expansion
Where possible, we look for potential tenant-led expansion opportunities when acquiring an asset. Tenants and their needs grow over time. As such, tenant-led expansion and refurbishment foster strong relationships between us and our tenants, improve the prospects of retaining a tenant over the long-term and increase the value of the asset.
Trilogy Funds’ tenant-led expansion strategy in action
In April 2018, Trilogy Funds acquired a property on Diesel Drive in Mackay for $7.25 million. At the time of 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.
Shortly after acquisition, Trilogy Funds worked closely with the tenant, Independent Mining Services (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.
In April 2025, an independent, external valuation was undertaken, which adopted a market value of $14.4 million.
In late-March 2026, Trilogy Funds sold the Diesel Drive property for $15.1 million, reflecting a substantial premium to the purchase price, and above the most recent valuation.
Trilogy Funds’ under-the-radar approach
Our team has the capability to manage industrial assets of varying size, complexity and location. This range – from smaller specialist facilities to large distribution centres, including those in regional areas – allows us to pursue opportunities that many competitors pass over. As a result, we’re often able to secure assets at higher yields than the broader market.
Acquisition of Quiksilver facility in North Geelong highlights our strategy
In November 2024, Trilogy Funds acquired 75-95 and 105 Corio Quay Road, North Geelong, for $33.5 million.
This substantial multi-warehouse complex was another strategic addition to the Trilogy Industrial Property Trust in Victoria’s key port-linked industrial market. Positioned on a 3.76-hectare site directly opposite Geelong Port, the asset comprises two warehouse / office buildings totalling 21,302 sqm of highly functional space, including full drive-around access, multiple loading solutions and extensive hardstand, all designed to enable efficient, large-scale distribution operations.
The asset was purpose-built for and is fully leased to Quiksilver Australia Pty Ltd and benefits from fixed annual rental increases of 3%, supporting reliable, income-focused performance for the Trust.
North Geelong’s logistics credentials are compelling, with immediate adjacency to Victoria’s second-largest port, new Spirit of Tasmania passenger and freight terminal. Excellent connectivity to the Princes Freeway and Geelong Ring Road provides access to the Geelong CBD inside five minutes, while Melbourne is accessible in under an hour.
The location’s scarcity value, which combines port frontage, multimodal access and a large landholding, supports tenant operations across national and international supply chains. This reinforces the Trust’s strategy of owning modern, well-located industrial assets that deliver consistent income and long-term growth potential for investors.
Issued by Trilogy Funds Management Limited ABN 59 080 383 679 AFSL 261425. Click for PDS and TMD for Trilogy Industrial Property Trust ARSN 623 096 944 includes further information and risks such as loss of part or all of your capital or no or lower than expected returns. Past performance is not a reliable indicator of future performance.
