This article is from the Australian Property Journal archive
CHARTER Hall has furthered the $1 billion-plus industrial spending spree across its funds management platform, with its Direct Industrial Fund No. 4 and a Charter Hall wholesale fund entering into a $214 million portfolio sale and leaseback agreement with Owens-Illinois Australia.
DIF4 paid $88 million for the glass manufacturing facility with an adjoining warehouse at 130-170 Andrews Rd in Sydney’s Penrith. Three properties were part of the deal. A Charter Hall wholesale fund simultaneously acquired 21 Simcock Ave in Spotswood, western Melbourne, and 617-625 Port Rd in Adelaide’s West Croydon for a total of $126 million.
The portfolio traded on a yield of 5.4%.
OIA is a manufacturer of glass for the Australian food and beverage industry with clients including CUB, Asahi/Schweppes, Lion, Simplot, and Bega. The company recently announced it is divesting Australian operations to Visy, and a wholly owned subsidiary of the packaging giant will be the tenant once the $733 million deal is complete at the end of July.
The sale and lease back agreement provides for a 20 year triple net lease with fixed 3% annual rent reviews.
“DIF4 continues to grow and meet investor demand for high quality exposure to the resilient industrial property market,” Charter Hall Direct chief executive officer, Steven Bennett said. “This acquisition shows the strength of the Charter Hall Group acquisition pipeline, utilising the combined capacity of its suite of funds to secure properties not ordinarily available to retail, HNW and SMSF investors.”
DIF4 fund manager, Miriam Patterson said the acquisition of the Penrith property enhances the fund’s quality of income and increases Sydney concentration, and extends the fund’s weighted average lease expiry to 10.8 years.
“The additional benefit of the triple net lease structure is that the landlord is not responsible for any ongoing costs in relation to the maintenance and upkeep of the property. The acquisition supports the current distribution yield of 6% available to investors in DIF4.”
This week, the $6 billion Charter Hall Prime Industrial Fund and a global institutional partnership managed by the group bought a 30.6 hectare automotive logistics park in Sydney’s Minto from Qube for $207 million.
It follows Charter Hall purchases of four ALDI logistics properties along the eastern seaboard in partnership with Allianz for $648 million, and of the Winc national distribution centre in Erskine Park for $115 million.
Charter Hall Group chief executive officer and managing director, David Harrison said this week the acquisitions are “further extending our strategy of becoming a leading player in the Australian industrial market”.
Also yesterday, Charter Hall’s Long WALE REIT announced the $15 million acquisition of the North Ryde SUEZ waste transfer facility in a sale and leaseback agreement struck at capitalisation rate of 5.0%.
Industrial and logistics facilities has become a favoured asset class, but the trend has intensified as manufacturing, warehousing and delivery demands skyrocketed during COVID-19 shutdowns across the world.
Charter Hall Retail REIT turned heads earlier this month, stepping away from its typical shopping centre targets to buy a 52% interest in Coles’ South Australia and Northern Territory distribution centre in Adelaide, and which followed the divestment of Pemulwuy Market Place and West Ryde Market Place shopping centres for $126.5 million.
Other heavy hitters including Stockland have been moving away from major retail assets and to the industrial and logistics sector as shopping centres face lower revaluations in the weakened retail environment.
Dexus and GIC’s logistics trust has just spent $173.5 million acquiring two new logistics facilities, including a cold storage facility in Sydney and Ford’s spare parts national distribution centre in Melbourne.
International investors are also taking notice of Australia’s logistics sector. Singapore’s Ascendas acquired a Yennora facility last week, South Korea’s pension fund is also looking to invest in the sector and Singapore’s ESR Cayman launched a $1 billion fund targeting prime logistics in Sydney, Melbourne and Brisbane.
