This article is from the Australian Property Journal archive
EXPLOSIVE giant Orica has sold a tract of surplus land in Melbourne’s west to UniSuper, which along with GPT Group and HB+B Property will develop a $1 billion logistics, warehousing and manufacturing estate on the site.
The $260 million transaction is of 66 hectares of land representing stage one of Orica’s selldown of 150 hectares of land. It had been put to the market in 2021 and its sale will net Orica $173 million in net profit after tax, the company said in an ASX statement.
“The sale will not affect the ongoing operations of Orica or its tenants on the bordering industrial precinct and will allow Orica to continue to focus on its core manufacturing and customer operations at Deer Park,” Orica said.
“The remaining surplus land at the site (stage two) is expected to be offered to the market in the future, pending the completion of remediation activities, securing approvals from relevant authorities, and supportive market conditions.”
The land at Deer Park has been used since around 1874 for manufacturing, storage and dispatch of explosive materials, mostly for the mining industry.
UniSuper’s unlisted property holdings now total $8 billion. The super fund was advised by GPT Group on the deal, as part of a $3 billion property mandate. GPT commenced management of UniSuper’s direct real estate mandate in 2022 after a number of mandates with AMP Capital were wound up.
“This super prime parcel of industrial land further improves the quality of our diversified unlisted property portfolio and adds to our exposure to the logistics and warehousing sector following on from other recent acquisitions,” said UniSuper’s senior manager, property, Nick Stephens.
In the middle of last year, UniSuper acquired a half-interest in a 20-asset portfolio of warehouse and logistics facilities across Sydney and Melbourne in a deal worth over $500 million, which saw it take a 50% stake in Dexus’ Australian Industrial Partnership from South Korea’s NPS.
Melbourne continued to see strong industrial space take-up in 2023, recording a nation-topping 239,1000 sqm JLL figures showed, putting further upwards pressure on rents.
According to JLL, industrial transactions across Australia fell 30% in 2023, a sluggish year across the commercial real estate market, to $5.92 billion. The sector made up 34% of all deals over the year.
GPT head of separate accounts, Greg Paddison, said, “The acquisition of surplus land at Deer Park for UniSuper is testament to our ability to acquire, develop and manage high-quality real estate investments together with our mandate clients”.
