Charter Hall continues logistics spree with $115m western Sydney buy
The acquisitive Charter Hall is continuing its post-crisis surge and has picked up a $115 million logistics property in western Sydney, adding to its $40 billion property funds empire.
The company believes the logistics sector will come through the widespread resetting of values best as consumers shift to buying more online, and broker JPMorgan on Tuesday called out the demand for industrial and long leased assets in the wake of the coronavirus crisis.
The broker said Charter Hall had 12 vehicles able to deploy capital, helping to counter any asset value declines in offices and shopping centres. Just last week, a Charter Hall fund and Allianz acquired Aldi’s logistics assets in a sale and lease back deal for $648 million and the company has now struck again in Sydney.
In the latest deal, the unlisted Charter Hall Prime Industrial Fund and Charter Hall Direct Industrial Fund No.4 bought the property from the Kador Group via an off-market transaction. The asset, at 40-66 Lockwood Drive, Erskine Park, reflected a 4.75% core capitalisation rate.
The distribution facility spans 43,000sqm, of which about 40,000sqm is used for warehousing, with the remainder for offices. It has a site area of 8.273ha with a site coverage of 52%, allowing for future development.
The facility was originally developed in 2008 for the tenant, Winc, as their national distribution centre. Winc have entered into a new 12-year lease to commence at expiry of their current lease in August 2020. The lease provides for annual rental escalations of 3.25%, with a mid-term market review in 2026.
