Charter Hall Direct’s industrial fund has acquired two food manufacturing facilities for A$141 milllion in a 30-year sale and leaseback transaction.
The sale and leaseback arrangement with food business Patties Foods provides for a 30 year triple net lease with fixed 3% annual reviews. The portfolio consists of two properties including the world class bakery in Bairnsdale and fast growing ready meals facility in Pakenham, Victoria, with a combined site area of 27.2 hectares.
The improvements comprise 46,175sqm of GLA (17% site coverage) including 41,478sqm of warehouse and total office area of 4,697sqm (10.2%) across both sites.
Patties Foods Chief Executive Office, Paul Hitchcock said “the sale and leaseback is part of the business’s future growth strategy.”
“Both facilities are critical to Patties Foods’ operations and this arrangement enables the company to invest in additional growth opportunities to support our people, business and brands. The business has recently entered new categories via acquisition, and we are now in a position to continue this expansion” said Hitchcock.
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“The Patties Food portfolio acquisition continues our successful sale and leaseback strategy which has resulted in more than $10.0 billion of sale and leaseback transactions in the past 6 years,” said Sean McMahon, Charter Hall CIO.
”Charter Hall through its strong relationships with leading corporate tenants in Australia continues to be dominant in the sale and lease back segment, unlocking exclusive opportunities for our investors. The Patties Foods acquisition also increases Charter Hall’s substantial portfolio in the food logistics sector joining groups including Coles, Woolworths, Metcash, ALDI, Inghams, Coca-Cola Amatil, Arnotts, and Marley Spoon.”
“We actively seek out properties leased to tenants in the consumer staples and food logistics sector because our investors consistently tell us that they value the defensive and stable cashflows these properties generate over the long term” added McMahon.
“Charter Hall Direct Industrial Fund No 4 (DIF4) continues to grow and meet investor demand for high quality exposure to the resilient Australian industrial property market. The acquisition will see DIF4’s WALE extend to a market leading 12.3 years and DIF4 also benefits from the annual 3% rent reviews under the Patties Foods lease. The Fund is currently providing a distribution yield of 5.9% per annum to DIF4 investors” said Steven Bennett, Charter Hall Direct CEO.
“The acquisition is consistent with DIF4’s strategy to acquire industrial properties leased to quality tenants on long terms leases” said Bennett.