Nick Lenaghan and Matthew Cranston
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LOGOS has snapped up a major Woolworths distribution centre in western Sydney from Lendlease’s Australian Prime Property Fund for $161 million.
The transaction is a major coup for LOGOS, which is backed by Macquarie and Ivanhoe Cambridge, the real estate arm of a major Canadian investment manager.
The Woolworths facility will become part of the the LOGOS Australia Investment Venture (LAIV), which has recently set a $500 million mandate to invest in industrial assets with value-add opportunities.
The property in the suburb of Minchinbury is the fourth asset to be purchased by LAIV, along with facilities in Sydney, Melbourne and Brisbane.
An aerial view of the logistics facility at Minchinbury. Photo: Airphoto Australia
“We are pleased to have secured this significant property, being business critical to Woolworths’ supermarket supply chain network,” said LOGOS joint managing director Trent Iliffe.
LAIV is currently looking at several more acquisition prospects, from greenfield sites to assets with scope for redevelopment.
“We are continuing to see good relative buying opportunities in the core logistics markets on the eastern seaboard of Australia, where we can add value in the short to medium term,” Mr Iliffe said.
LOGOS has so far developed and managed more than 100,000 square metres of industrial space – $300 million worth of sites – in western Sydney. It began due diligence on the 88,555-square-metre Woolworths facility last November.
The Woolworths warehouse at 69 Sargents Road has low and high-bay warehouse and expansive receival, sorting and dispatch areas and docks.
Woolworths has a five-year lease over the premises and also owns the freehold. Lendlease-managed APPF holds a 54-year ground lease over the land.
It was originally purchased by a consortium consisting of APPF and SAITeysMcMahon in 2006, as part of an $850 million sale and leaseback of 11 centres by Woolworths.
In September last year, the APPF decided to sell the warehouse and distribution facility, which sits on 21.4 hectares and is the largest asset in its industrial fund.
“The transaction is consistent with the fund’s strategy to continually review the forecast performance of assets and consider opportunities to acquire, divest or redevelop assets for the benefit of the fund’s investors,” a Lendlease spokeswoman said.
Colliers International’s Gavin Bishop and Tony Iuliano handled the transaction.
Mr Bishop said Minchinbury was regarded as an institutional investment-grade location, well supported by major corporates including Aldi and Startrack Express.
“This is a prized industrial asset with a blue-chip tenant so we expected a high level of interest,” Mr Iuliano said.
Lendlease’s investment arm has been busy in recent months, with its office fund buying a $250 million commercial tower being developed at the company’s Melbourne Quarter project and also divesting an ultra-green office tower nearby in Docklands.
Contracts for the Minchinbury transaction were exchanged as Lendlease bedded down its interim 2017 result for release on Monday.