Big profit on Cromwell's Bunnings sale to Charter Hall fund
An outer suburban Bunnings in Adelaide is the latest acquisition for Charter Hall’s Direct Industrial Fund No.4 (DIF4), which has bought $1 billion of property and doubled in size over the past 12 months.
The fund paid vendor Cromwell Direct Property Fund $48.8 million on a yield of 4.25 per cent for the Bunnings warehouse at Munno Para West, a fast-growing commuter suburb 40 kilometres north of the Adelaide CBD.
That is almost 80 per cent more than the $27.5 million Cromwell bought the asset for in 2015 and well up on its September, 2020, valuation of $36.5 million.
Cromwell’s head of retail funds management, Hamish Wehl, said the sale was a “great outcome” for unitholders and that capital will be redeployed into other assets.
The purpose-built property is fully leased to Bunnings with a seven-year weighted average lease expiry. It sits on a 41,000 square metre site with net lettable area of 17,000 square metres.
Charter Hall Direct chief executive, Steven Bennett, said the acquisition fits comfortably within DIF4’s strategy of buying quality industrial property near transport infrastructure coupled with strong tenant covenants.
“This acquisition builds on our momentum in the industrial and logistics sector,” said Mr Bennett.
“DIF4 has completed $230 million in acquisitions over the past three months and $1 billion over the past twelve months, demonstrating the ability for the Fund to deploy capital in a highly sought-after asset class that provides accretive returns.”
Head of industrial transactions at Charter Hall, Jack Walters, said the sector remains attractive despite increasing prices.
“The growth of the DIF4 fund reflects our high conviction and investor demand for these assets,” Mr Walters said.
“In particular, we have been active in acquiring properties leased to tenant customers in the essential services and non-discretionary asset classes, which have continually demonstrated to be a resilient and defensive investment.”
These acquisitions include the $141 million purchase of two factories from Patties Foods on a 30-year sale and leaseback deal.
