This article is from the Australian Property Journal archive
UNDERSCORING the accelerated demand for freight and logistics assets during the pandemic, Charter Hall’s flagship industrial fund has now raised $2.6 billion since April after its second raising closed oversubscribed.
The raising for the $5.8 billion Charter Hall Prime Industrial Fund (CPIF) was supported by both existing and 29 new investors, comprising a mix of Australian and offshore investors including super funds, pension plans, sovereign wealth funds, insurance companies, and financial institutions from Asia, the Middle East, Europe and North America.
Charter Hall’s managing director and group chief executive officer, David Harrison said the capital raising gives the fund the capacity to grow to in excess of $8 billion whilst maintaining gearing below its targeted 30% level.
He said the industrial and logistics sector continues to benefit from the rapid growth in online retailing and the focus on supply chain efficiencies.
“Most institutional investors are significantly underweight the industrial and logistics sector and recognise the potential growth and the attractive long-term, resilient returns available.
“The deployment of capital remains competitive.”
Spurred by e-commerce and logistics trends accelerated by the COVID-19 pandemic, industrial asset transaction volumes in Australia have outpaced office deals for the first time in almost 10 years, and global investment in the industrial sector has overtaken retail for the first time, as transaction volumes saw a sixfold increase over the past 10 years.
CPIF’s current portfolio comprises 76 assets and 2.6 million sqm of space, with 91% of the portfolio by value in the major eastern seaboard markets.
It has 52% exposure to the consumer staples sector, a $1 billion-plus “develop to core pipeline”, and five year forecast total returns. Weighted average lease expiry is 10.6 years, with 98% occupancy, weighted average annual rental reviews of 2.9% and 95% of tenants leased to government, publicly listed or national and global recognised tenants.
The fund has recently been part of $649 million acquisition of the Aldi distribution centre portfolio in partnership with Allianz, and purchase of a 30.6 hectare automotive logistics park in Sydney’s Minto.
CPIF outperformed the MSCI Mercer Australian Core Property Fund Index in delivering annualised total returns of 11.1% over the 12 months to the end of September, 10.6% over three years, 11.1% over five years and 11.2% over 10 years.
Charter Hall’s industrial and logistics platform now exceeds $11.5 billion. Charter Hall has just secured backing from Dutch pension fund PGGM for a new $800 million industrial real estate wholesale partnership, which it will seed with a portfolio with seven assets.
