This article is from the Australian Property Journal archive
ASX-listed Growthpoint has opted out of redeveloping a former Woolworths distribution centre in Melbourne’s northern suburbs, instead offloading the site to Ivanhoé Cambridge and LOGOS who will transform the site themselves into a $230 million logistics estate.
Ivanhoé Cambridge plans to develop the Broadmeadows site with LOGOS to act as the manager and developer. The new project will deliver over 120,000 sqm of logistics assets within the renamed LOGOS Broadmeadows Logistics Estate, focused on supporting the core logistics sectors of e-commerce, distribution, food and cold storage.
Woolworths had surrendered its lease at the beginning of February, leaving the 120 Northcorp Blvd asset in Broadmeadows empty. Growthpoint flagged its divestment as the nation reeled from the first round of coronavirus lockdowns as it reconsidered “non-essential capital projects”.
The sale price was $50.2 million.
“After reviewing our options for the site, we decided to sell this asset, as undertaking a lengthy development project was outside of our risk and return appetite in the current operating environment,” Timothy Collyer, managing director of Growthpoint, said.
“Proceeds from this sale will be used to repay debt, further strengthening our balance sheet.”
Growthpoint’s gearing is below target range and the group has no debt maturing until FY22. It entered a new $100 million debt facility with a new banking partner in May, and reported undrawn debt lines of $360 million and $43 million of cash in its full year results.
Warehouses within the estate ranging from 15,000 sqm to 50,000 sqm are now available for lease. The property offers easy access to Melbourne’s arterials the Western Ring Rd, Tullamarine Fwy and the Hume Hwy interchange, as well as the Victorian government’s planned North East Link.
Construction commencement is being targeted for early 2021 and the estate is targeting a 5 Star Green Star rating.
The sale was brokered by CBRE’s Chris O’Brien and Daniel Eramo.
“This transaction continues our strategy for logistics in the APAC region and our partnership with LOGOS,” Ivanhoé Cambridge’s senior vice president for Asia Pacific, George Agethen, said.
“We remain focused on assembling a sizeable portfolio in Sydney and Melbourne, which has shown remarkable resilience through the COVID-19 pandemic.”
The deal represents another logistics asset acquisition by LOGOS in the region this month, having just picked up an under construction estate in Epping with an end value of $70 million. That quickly followed its purchase of distribution centres in Sydney and Logan City for $172 million from healthcare company Sigma, with the backing of the New South Wales government’s financial management and investment arm, TCorp.
LOGOS’ head of Australia and New Zealand, Darren Searle, said this is a strategic acquisition for the business, “as a number of our existing customers have been looking to expand into the north of Melbourne, an area which has long experienced limited supply of prime grade logistics assets, for some time”.
Melbourne developer Pelligra is planning to invest $500 million to develop the former Ford manufacturing facilities in Broadmeadows, as well as Geelong.