THE world’s largest pie manufacturing facility – and home of Aussie classic Four’N Twenty – is up for grabs, with Patties Foods offering its pair of Victorian sites for sale with 30-year leasebacks.
The properties, at 169 Princes Highway in Bairnsdale and 28-46 Bald Hill Road in Pakenham, are being offered for sale in one line or individually.
They will be leased back to Patties on triple net deals, and represent the latest major offering with sale and leaseback terms that has been highly sought after institutional investors.
JLL’s Tony Iuliano, who is marketing the asset with Andrew Rowse, the offering is expected to attract a wide range of investors due to the long term income stream secured by an iconic tenant.
“Throughout 2020, we saw $2.23 billion of industrial investment sales as sale and leaseback transactions and we expect this trend to continue into 2021 and beyond.”
Funds management giant Charter Hall has been a prominent player in these types of deals, acquiring four ALDI logistics properties in partnership with Allianz for $648 million and being involved in the $214 million portfolio agreement with Owens-Illinois Australia, just taking into account the industrial sector.
Spurred by e-commerce and logistics trends accelerated by the COVID-19 pandemic, industrial asset transaction volumes in Australia have outpaced office deals for the first time in almost 10 years, and global investment in the industrial sector overtook retail for the first time in 2020.
Sitting on 158,316 sqm of land, the Bairnsdale site is Patties’ main production facility and the world’s largest pie manufacturing facility, utilised specifically to produce pies, sausage rolls and pastries.
The property is split into three main sections, for food manufacturing, meal preparation and packaging areas, and also includes offices, warehousing and administration areas.
Located close to Pakenham railway station, the second property comprises a 22,384 sqm purpose-built food production facility that combines food grade manufacturing and meal preparation, packing, warehouse, cold storage and office facilities.
Patties has pumped more than $37 million into the two sites over the last five years for capacity expansion and automation. The company recently invested over $15 million in a fourth production line at Bairnsdale to keep up with year on year demand.
Originally established in 1966, Patties Foods is the largest pie manufacturer in the world, producing some household brands, including Four’N Twenty, Patties, Herbert Adams, Boscastle and Nanna’s.
And it won’t be going anywhere.
“Patties has a long term commitment to both these sites, which is why we are taking on 30 year leases,” Patties Foods chief financial officer, Siobhan Hammer said.
“Patties will continue to invest in growth capital to further expand, enhance and automate. These investments have successfully enabled the company to grow and expand sales as well as creating hundreds of jobs.
“Bairnsdale and Pakenham are 2 key strategic sites within the Patties Australia portfolio. Bairnsdale is the engine room for Patties running 24/7 on its key lines, and Pakenham provides the company with the platform for accelerated growth in the near term.”
The company now employs over 1,000 staff across Australia and New Zealand.
Rowse said facilities will also attract significant interest due to the current resilience of the food retailing sector. Consumer retail spend on food increased from 41% in 2019 to 44% in 2020.
“The defensive nature of these assets, the substantial landholding and further development potential will all be key factors for investors,” Rowse said.
Expressions of interest close on 24th March.