Charter Hall wins the race for $300m Sydney industrial project

Charter Hall wins the race for $300m Sydney industrial project

Property funds manager Charter Hall (ASX: CHC) has come up trumps in its bid to secure a government lease on a prime 35ha industrial site in western Sydney.

The move paves the way for Charter Hall to proceed with the previously approved Light Horse Business Hub in Eastern Creek - a master-planned $300 million industrial precinct aimed at meeting the insatiable COVID-led demand for industrial properties.

Charter Hall's $7 billion wholesale and logistics funs, CPIF, has snared the leasehold on the site from the NSW Government's Western Sydney Parklands Trust (WSPT) via an open market tender process.

Goodman (ASX: GMG), Stockland (ASX: SGP), Mirvac (ASX: MGR) and Dexus (ASX: DXS) were all considered contenders for the site.

Under the deal, CPIF has secured a five-year development management agreement with WSPT to develop the Light Horse Business Hub located near the Light Horse Interchange for the M4 and M7 motorways.

The estate has an approved total gross lettable area of about 170,000sqm and can accommodate buildings of up to 100,000sqm. Work on the first industrial offering is expected to start later this year.
As each building is completed, CPIF will take a 90-year ground lease, paying WSPT an annual annuity to contribute to the cost of operating and maintaining the Western Sydney Parklands.

Charter Hall's CEO David Harrison says the agreement builds on a strong relationship with WSPT.

"(This) is the third transaction we have undertaken with them, following the Horsley Drive Business Park and Bringelly Road Business Hub development projects which have secured long-term lease commitments from major tenant customers such as Coles and Bunnings," he says.

"CPIF has secured a rare opportunity to acquire the Light Horse Business Hub, given its strategic location at the intersection of the M4 and M7 Motorways and immediately adjoining the Light Horse Interchange at Eastern Creek.

"This is one of the last significant infill greenfield industrial development sites east of the M7 capable of accommodating the growing demand for large state-of-the-art industrial and logistics facilities in Western Sydney."

CPIF's fund manager Richard Mason says the existing State Significant Development approval allows for reduced red tape in developing the site.

"(It will) allow CPIF to take advantage of changing consumption trends that have been fast tracked by COVID-19 and has led to increased demand from large omni-channel retailers and e-commerce occupiers," Mason says.

"The momentum in demand for strategic located industrial space is seeing record leasing activity, particularly for larger automated purpose-built facilities.

"The shortage of zoned, ready to develop land, provides the opportunity to further expand our modern logistics portfolio."

CPIF has a $7 billion portfolio of industrial and logistics assets, with another $780 million in its development pipeline. The fund says it has capacity to boost its portfolio close to $10 billion through equity flows and revaluation growth.


 

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