This article is from the Australian Property Journal archive
CHARTER Hall’s flagship industrial funds have acquired a 16.71-hectare Coles distribution facility in Smeaton Grange for $90.5 million from Singapore-listed Frasers Logistics & Industrial Trust.
The $3 billion wholesale Charter Hall Prime Industrial Fund and the $1.5 billion wholesale Core Logistics Partnership will each have a 50% interest in the asset following the off-market deal.
Completed in December 1998, the 80 Hartley Rd property in Sydney’s south-west has a gross lettable area of 61,281 sqm and features a cross-dock, high-clearance warehouse, office accommodation of 2,033 sqm, drive-around truck access, 104 access doors and 436 car parking spaces.
The property was purpose-built in 1998 for Coles Supermarkets Australia Pty Ltd and will have a remaining lease term upon extension of the existing lease of June 19 2023.
It is the fourth asset for CPIF and CLP, inclusive of the recently-acquired 6.5-hectare Eastern Creek development site that will eventually comprise a $70 million additional logistics facility.
The sale represents a 40.3% premium above the property’s book value of $64.5 million at the end of March, based on a JLL valuation as at the end of September last year, with a lease expiry on 19 June 2019. Its last valuation at July 1 was $85.0 million, and assumes the four-year lease extension with a new lease expiry.
It also represents a tidy 39.2% uplift on FLT’s purchase price of $65.0 million, when it was listed in 2016.
FLT CEO Robert Wallace said the sale is in line with its ongoing efforts to divest non-core assets and optimise the quality of FLT’s logistics and industrial portfolio.
FLT’s portfolio now comprises 60 properties in Australia, 17 in Germany and four in the Netherlands, with a total value of approximately $2.8 billion.
“This transaction offers our flagship industrial funds a contracted rental of $5.75 million per annum with a five-year WALE upon lease extension, with multiple releasing and development options in the future,” Charter Hall Group CEO David Harrison said.
“Industrial land values have doubled in Sydney in the last few years as the scarcity of prime land and the growth in tenant demand outstrips supply. The relatively high underlying land value of this acquisition provides a compelling feature of the property acquisition for the Group’s funds as they grow their exposure to Sydney, particularly the infrastructure-driven growth of South Western Sydney and the new Badgerys Creek Airport,” he added.
The property is strategically positioned within an existing industrial precinct, with good connectivity to the Hume Highway, M5 Motorway and the Northern Road.
“The acquisition of this modern, strategically located facility further strengthens Charter Hall’s cross-sector relationship with Coles and Wesfarmers and demonstrates our ability to partner with existing customers across our industrial and retail platforms.” Harrison said.
Closer to the city along the south-west corridor, private developer Leda Group paid $52 million to Lennox Industrial Inc for the eight-hectare site at 286 Horsley Rd in Milperra. It has a holding income of $2.1 million per annum, with Leda planning a subdivision and strata unit development on the site. The property has been tenanted by Heatcraft since the 1960s.
Australian Property Journal