LOGOS buys Woolworths site for $160m

The move, flagged by The Australian last November, boosts the Logos portfolio in the western Sydney industrial market and reinforces offshore interest in the local assets.

Ivanhoe, a Canadian heavyweight, also invests in Australian office towers and, like Macquarie Capital, has an equity investment in the $2 billion Logos business.

The newly-acquired asset will go into the unlisted Logos Australia Investment Venture, which has recently approved a $500 million capital investment in Australian prime industrial real estate with a focus on value add opportunities.

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The Minchinbury property is the fourth asset to be purchased by LAIV, adding to existing holdings in Sydney, Melbourne and Brisbane.

Logos joint managing director Trent Iliffe says the property is critical to Woolworths’ supermarket supply chain network and the firm is committed to buying assets in key logistics markets which provide the opportunity to deepen its supply chain relationships, including with Woolworths.

The Logos venture has several more properties under review as it still has “significant” buying capacity. It is looking at properties ranging from greenfield sites, through to assets with short to medium-term redevelopment opportunities.

The Woolworths-leased facility at Minchinbury.

“We are continuing to see good relative buying opportunities in the core logistics markets on the eastern seaboard of Australia, where we can add value in the short to medium term, providing solid risk adjusted returns for our capital partners,” Iliffe says.

The property at 69 Sargents Rd, Minchinbury, is a 88,555sqm facility on a 21.4ha site and is integral to Woolworths’ national supply chain network, servicing 180 supermarkets across Sydney. It has ambient and temperature controlled areas, full drive-around truck access, a substantial hardstand area and fully automated high clearance warehouse.

The asset, sold by Lend Lease’s APPF Industrial Fund, was chased by local and international groups due to the strong covenant of Woolworths and its near five-year weighted average lease expiry.

The deal was brokered by Colliers International national directors Gavin Bishop and Tony Iuliano.

“Minchinbury is regarded as an institutional investment-grade location, well-supported by major corporates including Aldi and Startrack Express. The area has limited land supply and a strong institutional and owner-occupier ownership structure which provides sound fundamentals for investing,” Bishop says.

Logos has developed warehouses spanning more than 100,000sqm in western Sydney, worth about $300 million, and has the second-largest industrial development pipeline nationally after Goodman Group, with $1.3 billion slated to be built over the next three years. Much focus has been on the keenly contested Sydney market. “Sydney has benefited from significant government infrastructure commitment over recent years, which has created challenges and opportunities for investors and users alike,” Iliffe says.

Logos has also been striking major deals in China as it bulks up its international operation. Ivanhoe Cambridge and US-based CBRE Global Investment Partners have committed to investing in its Logos China Logistics Venture.

This article originally appeared on www.theaustralian.com.au/property.