UniSuper plans $1b industrial park after paying $260m for Orica site in Melbourne

UniSuper plans $1b industrial park after paying $260m for Orica site in Melbourne

Render of the proposed industrial estate planned by UniSuper and GPT for the former Orica site

Orica (ASX: ORI) has sold a major greenfield industrial site in Melbourne’s west for $260 million to UniSuper, paving the way for the super fund to convert the explosives giant’s former manufacturing hub into a $1 billion logistics, warehousing and manufacturing estate.

The 66ha Deer Park site is part of a 150ha holding that Orica is selling in two tranches, with the company set to book a $173 million after-tax profit from the sale announced today.

The Orica site, which was placed on the market in 2021, has been earmarked by UniSuper for the development of a high-grade industrial estate that the industry super fund says will meet demand in ‘the increasingly constrained West Melbourne industrial precinct’.

The acquisition has boosted UniSuper’s unlisted property holdings to $8 billion with the deal advised by property investor GPT Group (ASX: GPT) as part of a $3 billion property mandate.

The super fund is partnering with GPT and developer HB+B Property to bring the logistics project to fruition in multi-year stages.

“This super prime parcel of industrial land further improves the quality of our diversified unlisted property portfolio and adds to our exposure to the logistics and warehousing sector following on from other recent acquisitions,” says UniSuper’s senior property manager Nick Stephens.

“The transaction highlights UniSuper’s ability to secure high quality property investments that help our members grow their retirement savings.”

GPT and HB+B Property are planning to upgrade access to major arterial roads including to Orica’s adjacent Deer Park industrial estate, as part of the infrastructure and civil works for the proposed $1 billion industrial precinct.

Orica says the sale of the site will not affect its ongoing operations, or that of its tenants, at its existing Deer Park industrial estate after the sale was settled yesterday (14 February).

Orica has not set a timeline for when the second tranche of the surplus land at Deer Park will be offered to the market.

“The remaining surplus land at the site is expected to be offered to the market in the future, pending the completion of remediation activities, securing approvals from relevant authorities, and supportive market conditions,” the company says.

Orica notes on its website that the Deer Park site has been used since about 1874 for the manufacturing, storage and dispatch of explosive materials most for the mining industry. In 2016, the company used a remotely operated bulldozer to clear contaminated soil on the property of nitroglycerine.

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