Charter Hall Group managed two funds, the Charter Hall Prime Industrial Fund (CPIF) and Charter Hall Direct Industrial Fund No.4 (DIF4), have acquired an industrial property portfolio from Owens-Illinois Australia (OIA) for A$215 million in a sale and leaseback transaction.
CPIF has acquired two properties, 21 Simcock Avenue, Spotswood, in Melbourne and 617-625 Port Road, West Croydon in Adelaide for a total of $126 million, whilst DIF4 has acquired 130-170 Andrews Road, Penrith in Sydney for $88 million. As part of the sale and lease back agreement, OIA will continue their occupation of all three properties with a 20 year triple net lease, with fixed 3.0% annual rent reviews.
“The $215 million Owen-Illinois Australia transaction continues our momentum in securing sale and leaseback portfolios from major corporates and demonstrates the Group’s ability to use the combined capacity of its funds to close large transactions, quickly and efficiently within the desired timeframes of vendors. The properties were acquired off-market and is testament to our ability to work with corporates to develop customised deal structures that support their broader investment strategies and release capital back into their business,” said Sean McMahon, Charter Hall CIO.
”Over the past 5 years, Charter Hall has undertaken more than $8 billion in sale and lease back transactions across the platform, including with groups such as Telstra, BP, ALDI, Arnott’s, Woolworths, Bombardier Transport, Bunnings, Coca-Cola Amatil and Ingham’s,” he added.
”This deal ties into the OIA & Visy definitive agreement announced overnight in the US, which may result in Visy being the ultimate tenant customer when the deal is expected to complete at the end of July,” the company said in a statement.
The industrial property portfolio has a site area of approximately 318,340sqm and ~146,000sqm of Gross Lettable Area (GLA). The assets comprise three glass manufacturing plants and warehousing facilities. OIA is the leading manufacturer of glass for the Australian food and beverage industry with clients including CUB, Asahi/Schweppes, Lion, Simplot, and Bega.
“The acquisition of Owens-Illinois Australia’s Spotswood and Croydon properties is consistent with CPIF’s strategy to acquire core industrial and logistics properties close to major road and rail infrastructure with attractive initial income yields growing at 3% per annum.Industrial land holdings of this size within core infill metropolitan locations are increasingly difficult to secure, particularly within the Melbourne industrial precinct which is currently seeing strong demand from industrial and logistics tenants,” said Richard Mason CPIF Fund Manager.
“The acquisition of Owens-Illinois Australia’s Penrith property enhances the Fund’s quality of income given the 20 year triple net lease, increases its Sydney concentration and extends the Fund’s WALE to a market leading 10.8 years. The asset’s initial income yield supports the Fund’s current distribution yield of 6% available to investors in DIF4,” said Miriam Patterson, Charter Hall Direct Fund Manager.