CSR has quietly become a property powerhouse, revealing on Thursday it will make an estimated $230 million pre-tax profit from the staged sale of a 52-hectare former brickworks site at Horsley Park in western Sydney.
The announcement came as ASX-listed CSR, better known as a building products manufacturer and part-owner of an aluminum smelter, sold the final 12.4 hectare parcel to data centre company NextDC for $124 million.
In a sign of the times, the land cost NextDC 2.35 per cent more per square metre than competitor Digital Realty outlaid when it paid $84 million for the 8.6 hectare plot next door last October.
Industrial giant ESR bought 20.7 hectares of the land for $142.5 million in 2019 to create the Horsely Logistics Park, while Frasers Property acquired an initial 10 hectare tranche for $58 million.
David Fallu, chief financial officer and executive general manager of property at CSR, said it still controls more than 300 hectares of development land in western Sydney, the value of which has almost doubled in two years.
Mr Fallu said the pipeline, which includes 200 hectares in the Western Sydney Airport precinct rezoned industrial last September, is now valued at $900 million – up from $500 million in 2019.
He said when CSR first started selling off the Horsley Park site in 2018, Frasers Property paid $580sq m compared with $1000sq m for the latest sale, negotiated by Jason Edge and Cameron Grier from CBRE.
But Mr Fallu cautioned that the NextDC and Digital Realty prices are in part a reflection of their proximity to a “major” electricity power substation and telecommunications infrastructure.
Mr Fallu said CSR has owned the Horsley Park land for five years.
“The site came in as part acquisition of the Boral business when we concluded our joint venture of our two bricks business,” he said.
“One of the benefits of being in a business that’s 160 years old is you’re manufacturing footprint is pretty old.”
Profits from the site, where remediation and civil works on two of the six tranches are already complete and occupied by the buyers, will flow through to the CSR bottom line over the next four years.
CSR will net $408 million from the site sales, spending around $178 million on development costs.
NextDC said in a statement that, subject to development approval, it will build a data centre with “approximately 300MW of capacity, mission critical operation centres, offices and collaboration spaces” on the site.