Charter Hall Sells Melbourne Warehouse Complex to Barings for $62M

Charter Hall’s Core Logistics Partnership has sold a suburban Melbourne warehouse to Barings for A$94.1 million ($62.2 million), with the proceeds to be redeployed into developing the Australian property investor’s existing land banks.

The property at 2-30 Saintly Drive in western Melbourne’s Truganina was acquired by the wholesale core industrial fund in 2015 for A$41.7 million and consists of three warehouses totalling 46,933 square metres (505,183 square feet), Charter Hall said Wednesday in a release.

CLP’s disposal will help fund construction of Ascent on Bourke, Charter Hall’s multi-level warehouse in Sydney’s inner suburb of Alexandria with a planned 25,566 square metres of space.

“Central to CLP’s strategy is delivering advanced industrial facilities and creating value for our investors,” fund manager Simon Greig said. “With a significant development pipeline in place, this sale enables us to unlock capital that will be recycled into new opportunities for growth and drive greater returns for our investors.”

New Seed Asset

The sale price of 2-30 Saintly Drive is in line with book value and implies a passing yield of 4.7 percent, Charter Hall said. The sheds are primarily leased to Aussie e-commerce platform Catch and third-party logistics provider Efflog Operations, with a weighted average lease expiry of 2.4 years.

The warehouse complex will serve as the seed asset for a A$1 billion industrial partnership between fund manager Barings and REST, a pension fund for retail employees, according to the Australian Property Journal.

The A$400 million CLP was set up in 2013 by Charter Hall and two Australian institutional investors to acquire and manage core logistics properties. Charter Hall holds a 5.6 percent stake in the fund valued at A$92.4 million, per the company’s 2023 annual report.

Industrial CEO Richard Stacker announced in August that Charter Hall had delivered A$857 million in new facilities via its development pipeline in the preceding 12 months and that Ascent on Bourke was 80 percent pre-leased to retailer Coles and elevator/escalator maker Schindler.

That same month brought news of a A$1.25 billion capital raise in the Asian debt market for Charter Hall Prime Industrial Fund, the firm’s A$13.5 billion flagship development vehicle.

Double Your Pleasure

Charter Hall wasn’t the only fund manager doubling its money with an Aussie shed disposal this week. Mingtiandi reported Thursday that M&G Real Estate had sold a western Sydney logistics complex to ESR for A$107 million, capturing some value after buying the asset eight years ago for a reported A$50 million from Dexus Property Group.

Hong Kong-listed ESR picked up the two-building facility at Erskine Park industrial estate on behalf of the warehouse specialist’s core-plus ESR Australia Logistics Partnership III.

Mingtiandi reported last year that ESR had raised A$600 million ($410 million) for the third core-plus logistics fund focused on the Australian market, with financial support provided by Singapore sovereign fund GIC.