Two Charter Hall-owned (ASX: CHC) funds have spent more than $100 million on government-leased industrial assets in South Australia, expanding its exposure to the Adelaide market.
The two properties are an industrial complex at Netley Commercial Park for $71.3 million and a warehouse in Gepps Cross for $30.7 million, both leased to the South Australian Government.
The Netley Commercial Park complex was acquired by Charter Hall’s Prime Industrial Fund (CPIF) and is located adjacent to the Adelaide Airport - less than five minutes from Adelaide’s CBD.
With the SA Government as its tenant, CPIF fund manager Richard Mason said the asset offers significant potential for redevelopment in the medium to long term.
“This asset aligns well with our strategy, underpinned by a government tenant and high underlying land value providing significant upside potential over the long-term,” Mason said.
“The 13.47 hectare site is one of the largest parcels of industrial zoned land in the vicinity, with scale that is increasingly rare and difficult to secure in this location.
“It will benefit from the planned redevelopment of the Airport East Logistics Hub, with a number of tenant customers expressing interest in relocating to the precinct.”
The second property, the warehouse in Gepps Cross, was purpose-built for SA health and is 100 per cent occupied by the government organisation with a 15-year net lease, providing stable income growth over the investment horizon for new owner Charter Hall-managed fund DIF4.
“We are pleased to be expanding DIF4’s spread to prime, modern industrial real estate, with the addition of a high quality, purpose-built asset leased to the South Australian government, which is a major tenant customer across our Industrial & Logistics and Office portfolios in metropolitan Adelaide,” Charter Hall direct fund manager Julian Menegazzo said.
“Gepps Cross is a prime industrial area in Adelaide and extremely well-positioned with respect to the arterial road and freight network.
“This acquisition is in line with our strategy and will provide us stable income growth and is nearby to other major Charter Hall modern assets leased to Metcash and Schneider.”
Charter Hall head of industrial transactions Jack Walters said the acquisitions contribute to more than $900 million in purchases completed in the industrial sector since 1 July 2021, driving the group’s industrial & logistics portfolio funds under management to more than $17 million.
“These acquisitions continue to demonstrate our ability to work with our major agent relationships in an off-market capacity to acquire core logistics properties, leased to high-quality tenants which are situated close to major infrastructure,” Walters said.
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