Woolworths charges into Light Horse hub
Woolworths will splash $400m on a site at the $213m Light Horse Interchange Business Hub at Eastern Creek. Picture: Supplied
Supermarket giant Woolworths has committed to a near $400m facility in Charter Hall’s Light Horse Business Hub in western Sydney.
The move will expand the supermarket company’s chilled and fresh network as it looks to service supermarkets across NSW and shows that operators are chasing ever larger distribution centres.
Property companies are dealing with a wave of tenants who are chasing modern facilities which will help them overhaul their networks and make them more efficient.
Woolworths is planning a two storey warehouse in the southwestern part of the Light Horse Business Hub and its development has an estimated capital investment value of $373.4m. It will become part of the supermarket company’s supply chain distributing to stores located across the broader NSW region.
Woolworths said the facility would support its business growth strategy while optimising its NSW chilled and fresh network, which cannot be serviced by its existing Minchinbury facility.
The supermarket giant said more than 230,000 cartons per week are handled via less efficient external third party logistics operations. The overflow volume is serviced by AMC Arndell Park, which will reach maximum operational capacity by next year.
Woolworths said transport and distribution centre costs and store deliverables had increased and were expected to increase with an additional overflow facility and volume after 2023. It said these factors were impacting store servicing levels.
The supermarket giant said its current Sydney temperature controlled and fresh supply chain was unable to support plans to expand its range, making the proposed Eastern Creek facility, which would come online in 2026, critical.
Charter Hall last year set its sights on developing the site into a major logistics project, after its wholesale industrial and logistics fund, CPIF, picked up the leasehold interest in the overall 35ha parcel.
This strategic holding is leased from the Western Sydney Parklands Trust. The Charter Hall fund entered into a five-year development management agreement with the trust to develop the approved hub.
It would then enter a 90-year ground lease providing an annual annuity to the trust to contribute to the cost of operating, maintaining and enhancing the Western Sydney Parklands.
The business hub – at the intersection of the M4 and M7 motorways and adjoining the Light Horse Interchange – is billed as one of the last significant infill greenfield industrial development sites east of the M7 able to accommodate growing demand for large state-of-the-art industrial and logistics facilities in western Sydney.
A Woolworths spokeswoman said the company was committed to future-proofing its network across the country. “Events over recent years have demonstrated the need for a robust supply chain, ensuring that we can continue to serve growing communities fresh food and essential supplies, and at the pace our customers expect,” she said.
