Local fund manager Hale goes deep in cold storage
A fast-expanding local investment platform, Hale Capital Partners, has snapped up a large warehouse in Melbourne’s south-east that it plans to transform into a cold storage facility, worth potentially well north of $100 million.
The deal, for around $50 million, is the latest acquisition for the fund manager and developer. Founded just four years ago, it has grown its portfolio and pipeline to about $3 billion by partnering with major global institutions such as Oxford Properties, LaSalle Investment Management and Warburg Pincus. It is led by Nicholas Bradley and Robert McMickan, former executives at Goodman and Mirvac respectively.
Previously occupied and owned by tech firm Synnex, the logistics facility at 92 Carroll Road in Oakleigh South covers almost 20,000 square metres, on a land parcel twice that size. But the structure, flooring and height are such that it was feasible to convert the space into a 27,000 sq m cold storage facility – referred to in the industry as “adaptive re-use”.
“We didn’t need to push much further than what was already there from a structural perspective,” Bradley told The Australian Financial Review.
The facility will be developed up to freezer capacity and divided into four separate units, to allow for tenants with varying needs. Most importantly, it will be built “on spec” – with no tenant pre-commitment – as Hale has also done in Brisbane.
“We saw the same thematic down here, where there is almost zero vacancy in [the] cold store [market],” Bradley said.
“We did a deep dive into the market. With 100 per cent freezer [capacity], you have the ability to shut down certain chambers of the facility to meet different temperature needs, rather than ‘up-spec’ the facility at a later date,” he said.
Since its establishment, Hale has focused on infill logistics projects, developing multi-level warehousing at some sites, as well as cold storage and industrial outdoor storage.
It launched a $300 million equity raising last year and expects to finalise its next series of funds within weeks.
“We’re bringing in institutional capital to invest in the infill markets and we have a lot of those tier-one global investors alongside us,” Bradley said.
The Oakleigh South property was brokered by JLL’s Stephen Adgemis and Jack Kelliher. It was originally conceived as a finished goods warehouse for Phillips Appliances before it was taken over by Synnex, which subsequently moved to a high-tech, automated facility nearby on a site purchased from German retailer Kaufland.
JLL’s Kelliher said the 92 Carroll Road sale reflected a growing investor focus on assets suited to cold storage, with national demand for temperature-controlled logistics space now exceeding 300,000 sq m.
“Cold storage is one of the most undersupplied segments in the industrial market. Australia currently has just 0.4 cubic metres of cold storage capacity per capita, compared with over 0.6 cubic metres in the UK and US, and up to 0.9 cubic metres in parts of Europe,” he said.
