This article is from the Australian Property Journal archive
CHARTER Hall’s wholesale industrial and logistics fund has acquired the Australian manufacturing hub of global pharmaceutical group GlaxoSmithKline in Melbourne’s east for $106 million, and an eye to its value add potential.
The Boronia facility is currently used by GlaxoSmithKline (GSK) to produce high-volume products and “blow-fill-seal” manufacturing. GSK will lease back the property for 2.3 years on triple net terms from settlement with annual CPI reviews.
The site spans 16.8 hectares and is improved by 33,878 sqm of pharmaceutical grade, campus style improvements comprising a mixture of temperature controlled and ambient high clearance warehousing, corporate offices and laboratories.
The low 20% site coverage offers multiple strategic options to create long-term secure income streams and add incremental value through redevelopment, according to Charter Hall Prime Industrial Fund (CPIF). It is located some 30 kilometres east of the Melbourne CBD and is one of the last remaining industrial zoned land holdings of significant scale in the area.
The Mountain Highway location puts it close to Eastlink which connects the Eastern, Monash and Peninsula Link freeways.
“The site provides CPIF will multiple strategic options following GSK’s departure in late 2023. There is potential for substantial future redevelopment and repositioning opportunities to expand or reconfigure the existing improvements, given its large land holding and low site coverage,” CPIF’s fund manager, Richard Mason, said.
“The acquisition is in line with CPIF’s strategy to increase its geographical exposure to core eastern seaboard markets, being one of few opportunities of significant scale in the tightly held eastern Melbourne industrial market where prospects for rental growth are considered strong and historical trend for valuation growth has typically outperformed the broader industrial market.”
The $7.0 billion CPIF kicked off May with the acquisition of 25 cold storage and food distribution centres in a $270 million sale and leaseback deal with PFD Food Services.
Charter Hall has been a major player in the market rush for industrial and logistics assets, having now acquired more than $2.6 billion in industrial and logistics facilities so far in the financial year. Also recently, its Direct Industrial Fund No. 4 snapped up a pair of Patties Foods sites Victoria for $141 million in another sale and leaseback deal.
“This increases our exposure to the rapidly growing life sciences sector and is a further demonstration of our ability to work with corporates to deliver efficient solutions to their property requirements.” Charter Hall’s chief investment officer, Sean McMahon said of the latest purchase.
“We look forward to working with GSK as they transition from the site and engaging with the life sciences industry to pursue alternate operators to create a key pharmaceutical manufacturing and business hub.
“In parallel, we will investigate other employment related uses in this zone that will compliment this precinct.”
The transaction was brokered by CBRE’s Chris O’Brien, Ben Hegerty, Rory Hilton and Andrew Bell.
