Charter Hall saddles up for $300m Light Horse

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CHARTER Hall’s wholesale industrial and logistics fund, CPIF has emerged successful in the race to secure a 90-year leasehold in 35 hectares of the $300 million-plus Light Horse Business Hub in western Sydney.

The master planned approved industrial land in in Eastern Creek is being leased from the New South Wales government’s Western Sydney Parklands Trust (WSPT). The estate has an approved total gross lettable area of 170,000 sqm and can accommodate large scale warehousing and distribution facilities up to 100,000 sqm.

Charter Hall had been competing with major players Goodman, Dexus, Stockland and Mirvac the leasehold was put to the market for tender in September.

CPIF has entered into a five-year development management agreement to develop the Light Horse Business Hub and CPIF will enter a 90-year ground lease upon completion of each new facility, providing an annual annuity to the trust that will contribute to the cost of operating, maintaining and enhancing the western Sydney parklands for the benefit of the local community.

Works are planned to commence on site later this year.

Charter Hall’s managing director and group CEO, David Harrison, said this is the third transaction Charter Hall has undertaken with WSPT, following the Horsley Drive Business Park and Bringelly Road Business Hub development projects that have secured long term commitments from tenants such as Coles and Bunnings.

“This is one of the last significant infill greenfield industrial development sites east of the M7 capable of accommodating the growing demand for large state of the art industrial and logistics facilities in western Sydney,” Harrison said.

He added that the Light Horse Business Hub represented a rare opportunity given its strategic location at the intersection of the M4 and M7 Motorways and immediately adjoining the Light Horse Interchange at Eastern Creek.

“The acquisition of the 90-year leasehold interest in the Light Horse Business Hub replenishes CPIF’s Sydney land holdings and is in line with CPIF’s strategy of acquiring well located sites close to major transport infrastructure with easy access to large consumer markets,” CPIF’s fund manager, Richard Mason said.

“The existing State Significant Development approval will provide significantly reduced planning timeframes and allow CPIF to take advantage of changing consumption trends that have been fast tracked by COVID-19 and has led to increased demand from large omni-channel retailers and e-commerce occupiers.

“The momentum in demand for strategic located industrial space is seeing record leasing activity, particularly for larger automated purpose-built facilities. The shortage of zoned, ready to develop land, provides the opportunity to further expand our modern logistics portfolio.”

The $7.0 billion CPIF last month acquired 25 cold storage and food distribution centres in a $270 million sale and leaseback deal with PFD Food Services, and in recent days picked up the Australian manufacturing hub of global pharmaceutical group GlaxoSmithKline in Melbourne’s east for $106 million, and an eye to its value add potential.

Charter Hall has been a major player in the market rush for industrial and logistics assets, having now acquired more than $2.6 billion in industrial and logistics facilities so far in the financial year. Also recently, its Direct Industrial Fund No. 4 snapped up a pair of Patties Foods sites Victoria for $141 million in another sale and leaseback deal.

CPIF has a further $780 million committed development pipeline, and said it has funding capacity to grow its portfolio toward $10 billion with equity flows and imminent revaluation growth.

Listed pure-play industrial trust Centuria Industrial REIT this week posted another sizable valuation gain in response to the ongoing surge in demand for data and warehousing during the pandemic.

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