Charter Hall fund takes a shine to Viridian Glass
In a $100 million deal, the Charter Hall Prime Industrial Fund has bought the Melbourne manufacturing home of Viridian Glass after the company was taken over by private equity player Crescent Capital Partners late last year.
The property on Greens Road in Melbourne’s Dandenong South has been occupied by Viridian since the 1960s and is its national headquarters.
The deal was struck on a yield of 5.75 per cent through a sale-and-leaseback arrangement. Viridian will lease the property for eight years with fixed 3 per cent annual rent reviews.
The property hit the market in April after building products group CSR sold the Viridian Glass business to Crescent Capital Partners for $155 million last year, ending its costly association with glass manufacturing.
CSR had separately held onto the industrial property that is Viridian’s Sydney base in Ingleburn, which it subsequently divested.
Crescent then moved to reap a return from the underlying real estate at the facility in Melbourne’s south-east, appointing JLL’s Tony Iuliano and Adrian Rowse to broker the 20.01-hectare site.
The property has warehouses, office and ancillary buildings, a small cold store, drive-around truck access and parking areas. In all, it comprises 77,124 sq m of lettable space with another 4.1 hectares of expansion land.
“This transaction with Viridian Glass aligns with our strategy of undertaking sale and lease back transactions with major corporates and government entities,” said Richard Stacker, Charter Hall’s chief executive for its industrial business.
Over the past five years, Charter Hall has undertaken more than $5 billion of sale-and-leaseback style deals across its platform with groups such as Telstra, Woolworths, Bombardier Transport, Bunnings, Coca-Cola Amatil, Inghams, and Peters Ice Cream.
CPIF fund manager Richard Mason said the acquisition followed the fund’s strategy of purchasing core industrial and logistics properties close to major road and rail infrastructure. It would also provide the fund with a significant land bank for future development.
“Industrial land holdings of this size within core infill metropolitan locations are becoming increasingly difficult to secure particularly within the Dandenong South industrial precinct which is currently seeing strong demand from industrial and logistics tenants,” he said.
Viridian is the country’s largest provider of glass and the only Australian manufacturer of float glass, typically used in windows, and the company’s foundation product.
Improvements to the site include a $250 million float-glass tank, which has a capacity of up to 160,000 tonnes per annum.
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