Charter Hall acquires international distribution centre in VIC for $29.25 million

Charter Hall, one of Australia's leading property fund managers and property developers, announces that its Core Plus Industrial Fund (CPIF) has acquired off market the Fastline International Distribution Facility in Derrimut, Melbourne for $29.25 million. This acquisition clearly demonstrates the value that can be derived for both the vendor and the purchaser by avoiding uncertain outcomes often experienced with open market campaigns.

The property was purchased on a market yield of 6.77% with a 20 year lease to Fastline, subject to fixed 3.5% annual increases. The facility also provides the ability to further subdivide the building into two tenancies with services already in place, thus enabling the potential for higher reversionary rental.

Strategically located on the south west corner of Fitzgerald Road and Fulton Drive, Derrimut one of Melbourne's core logistics precincts, the property is positioned within the well regarded Gilbertson's Industrial Estate approximately 800m from the Western Ring Road on/off ramps, providing excellent access to the port, airport and CBD. The facility comprises a modern high clearance warehouse and distribution centre with a combined gross building area of 30,778m2 excluding the extensive hardstand area. The property provides ample car parking for 131 cars and has three street frontages.

The precinct's values are expected to benefit from the completion of the Deer Park Bypass which is anticipated in 2009. The new infrastructure will provide a further link to the Western Freeway Ring Road, which will enhance travel time critical to logistics operations. 

David Harrison, Charter Hall's Joint Managing Director said: "The acquisition further demonstrates Charter Hall's confidence in Melbourne's Industrial rental growth prospects off a relative low base compared with other capital city markets."

This latest acquisition is the second core plus industrial acquisition for CPIF in Victoria and brings the Fund's assets to 9, with a total portfolio value of approximately $303 million.

Paul Ford, CPIF Fund Manager said: "This acquisition continues to support the funds strategy to focus on core locations, highly generic and efficient buildings, whilst increasing the funds exposure to the nation's largest and growing industrial market. Paul Ford also commented that CPIF is likely to focus on enhanced opportunities in the short to medium term having now established a solid core base from which to leverage.

The transaction was negotiated by David Norman from Savills.