This article is from the Australian Property Journal archive
IN the largest industrial deal of 2020 to date, Charter Hall and Allianz have acquired four ALDI distribution centres on the east coast for $648 million, in a sale and leaseback deal showing the hunger for logistics assets with tenants in the food industry.
German supermarket giant ALDI designed and built the distribution centres, located within the prime Sydney industrial hubs of Minchinbury and Prestons, in the south eastern Melbourne suburb of Dandenong, and Brendale in Brisbane’s north.
They were sold with seven-year lease back initial terms plus multiple seven-year options on a yield of circa 4.75%.
The Charter Hall-managed, $6 billion Charter Hall Prime Industrial Fund and Allianz Real Estate, acting on behalf of several Allianz group companies, comprise the 50-50 joint venture.
“Accessing the ongoing growth and resilience of grocery retailing in Australia has been a consistent thematic driving the growth of our industrial and logistics portfolio toward $10 billion and beyond, now representing 25% of our enlarged $40 billion platform,” David Harrison, managing director and group chief executive officer of Charter Hall said. The group last month secured long-term pre-lease commitments from major supermarket Coles for two new facilities in Sydney and Melbourne totalling 60,000 sqm that will be used as high-tech customer fulfilment centres online orders.
Rushabh Desai, Asia Pacific chief executive officer of Allianz Real Estate, said the transaction is in line with the global institutional investor’s strategy of aligning investments to secular mega trends in the Asia-Pacific region.
“Demand for logistics in Australia is underpinned by growth in e-commerce, increasing international trade and the resilience of non-discretionary retail spending. This will provide our investors an attractive distribution yield.”
JLL’s head of industrial capital narkets & logistics, Tony Iuliano and team including Roger Miller, Adrian Rowse and Gary Hyland transacted the sale.
Iuliano said the portfolio had “all the right investment ingredients” – institutional grade distribution centres in the sought after food sector, triple net leases, seven year lease covenants, and total income of $30.1 million per annum.
“The appeal to the joint venture between Charter Hall and Allianz of these assets is the investment focus on defensive industries, particularly food related tenants. The current opportunities for growth in food retailing and online distribution will only increase the attractiveness of these assets and the competition to acquire them.
“We have witnessed capital inflows opening and back in the market over the past four weeks looking for stabilised secure cashflows with the opportunity to grow and develop relationships beyond the initial purchase.”
JLL said it has identified in excess of $1.2 billion of sale and leaseback transactions currently underway or to be offered to the market in the first half of this year.
“Corporates will continue to capitalise on the high demand for transactions involving portfolios that increase scale in the Australian industrial market through sale and leaseback,” Iuliano said.
