$120m deal for Kmart distribution centre
International property group Logos has swooped on the Kmart distribution centre in the Melbourne suburb of Truganina for close to $120 million in one of the year’s largest industrial deals.
The move signals the group’s commitment to expanding its $4.2 billion worth of holdings and it has also appointed industry veteran Darren Searle as head of Australia and New Zealand to support its growth.
The Kmart complex is the firm’s third acquisition in the Melbourne industrial suburb in the past month, with the group also picking up an industrial site at 285 Palmers Rd, which it will develop into a 160,000sq m logistics estate, and it has also acquired a new facility on Infinity Drive.
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The 77,000sqm Kmart centre is fully leased to the retailer with the complex, which was sold by Invesco, which had picked it up in 2014 and benefited from capitalisation rate compression.
The Andrews government’s proposed road upgrades, including the West Gate Tunnel Project, will boost connections to Truganina for logistic operators.
Searle says that Truganina is “one of Australia’s core industrial locations” with many large operators, including Coles, Woolworths and the Reject Shop, operating from this suburb. The Kmart centre is a “strategic addition” to the growing Logos portfolio of core assets in key markets, he says.
Sales agents Chris O’Brien of CBRE and Tony Iuliano of JLL brokered the transaction.
“Product of scale in the logistics space within Australia is becoming increasingly difficult to obtain,” O’Brien says.
Iuliano says there is pent-up demand in the sector with an estimated $17 billion of unsatisfied capital looking for industrial and logistics property in Australia. The Kmart centre offered both a long-term income stream and flexibility in its design, he adds.
Logos chief executive Tom Lee says the Australian business has experienced significant growth over the past few years and has built a “significant portfolio” across key corridors in Melbourne, Sydney, Brisbane, Perth and Auckland.
Searle headed development at Logos and was previously general manager of property development for Toll Group.
The local Logos portfolio includes assets and developments across NSW, Victoria, WA, Queensland and Auckland.
This article originally appeared on www.theaustralian.com.au/property.
