US Builder Cabot Expands Into Sydney With $92M Shed Buy From LaSalle

Cabot Properties has purchased a two-storey warehouse in suburban Sydney from LaSalle Investment Management for A$137.6 million ($91.8 million), marking the US logistics builder and fund manager’s first acquisition in the Harbour City.

The newly built shed in the Matraville area of southeastern Sydney spans 19,819 square metres (213,330 square feet) and is among the first institutional-grade multi-storey logistics properties completed in Australia, Cabot said in a release.

The transaction, which follows Cabot acquisitions in and around Melbourne, aligns with the Boston-based firm’s strategy to invest in infill industrial real estate in top global logistics markets.

“We are excited to expand Cabot’s presence in Australia,” said Sally Box, Cabot’s managing director of investments for Asia Pacific. “As an established product type across Asia but an emerging one in the Australian landscape, multi-storey warehouses are attractive for many reasons — but among the most important is the increased density, which maximises land use to both enhance sustainability and increase storage capacity, ultimately supporting greater distribution capabilities.”

Southern Strategy

The warehouse at 42-52 Raymond Avenue was developed by JLL affiliate LaSalle in partnership with Sydney-based asset manager Hale Capital Partners.

The ramp-up facility consists of four units ranging in size from 4,640 to 5,109 square metres, one of which is leased to an established local supplier of roofing material, Cabot said. The development features a 300-kilowatt solar photovoltaic system, energy monitoring systems, a rainwater recycling system and an EV charging station.

The property lies east of Sydney Airport and has access to key transport arteries like the Eastern Distributor, Southern Cross Drive, M5 Motorway and the new WestConnex M8 Motorway, with 3.4 million residents within a 45-minute drive.

In Kingsgrove, to the west of the airport, private equity giant Blackstone acquired a logistics complex from Charter Hall in April for A$55.8 million ($39.4 million), chalking up the Sydney industrial market’s biggest investment deal of the second quarter, according to CBRE.

Both assets are in the land-constrained South Sydney submarket, which like other infill precincts has demonstrated “superior resilience” in land values during recent years, in contrast with broader market trends, CBRE said in a market update.

“Notably, current land values in these inner precincts command a significant premium, exceeding those in Outer Western precincts by more than double,” the consultancy said.

Melbourne and More

Founded in 1986, Cabot has invested more than $15 billion in logistics real estate and operated over 1,600 buildings in excess of 230 million square feet (21.4 million square metres).

The firm acquired a development site in Campbellfield, a northern suburb of Melbourne, in 2022 for A$41 million as part of plans to build a logistics estate with a completion value of A$130 million, the Property Tribune reported. Cabot also has an industrial development in Melbourne’s western suburb of Truganina and projects in the city’s southeast.

Back home, the firm led by chairman and CEO Franz Colloredo-Mansfeld sold $2.8 billion in logistics assets to Blackstone through two separate transactions in 2021, according to an account by the Boston Real Estate Times. The portfolios comprised a combined 124 properties spanning 17.4 million feet across the US and Europe and were held by Cabot’s 2016-vintage Value Fund V.

In January, Cabot announced the $1.57 billion final closing of its Value Fund VII focused on acquiring, developing and redeveloping high-quality infill industrial assets in supply-constrained markets of the US, Europe and Asia Pacific. The flagship fund series has raised more than $5.75 billion in equity, Cabot said.