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Charter Hall Group today announced that its largest industrial fund, the $5.8 billion wholesale Charter Hall Prime Industrial Fund (CPIF), has secured a 6.45 hectare site in Epping, Melbourne and has agreed to a 34,777sqm pre-lease to Visy Logistics (Visy) on a 10-year term commencing in March 2021, when the facility is expected to be completed.
The circa 33,800sqm high clearance warehouse will comprise 8 recessed loading docks and 11 at-grade roller door access points with 20 – 35 metre wide canopies. The facility will also include a two level office of circa 1,059sqm, parking for 208 vehicles and a separate truck parking and staging area. Visy has signed a 10 year net lease with 3 x 5 year options and fixed annual rent reviews of 3.25 per cent. Visy will be relocating from CPIF’s Somerton Logistics Centre.
Charter Hall’s Chief Investment Officer, Mr Sean McMahon, said “Post the recent $215 million sale and leaseback of three assets from Owens-Illinois Australia which is a wholly owned subsidiary of Visy, and this transaction at Epping, Visy has grown to become a major tenant customer of Charter Hall with over $290 million of assets leased with a weighted average lease expiry (WALE) of 17 years.
“As one of Australia’s largest industrial and logistics owners and developers, Charter Hall was able to leverage its scale and flexibility to deliver a smart, long-term solution to Visy allowing their business to grow. We look forward to expanding the Visy relationship” said Mr McMahon.
Visy’s Group General Counsel, Mr Robert Kaye, commented “Visy is excited to be partnering with Charter Hall in creating another state of the art facility. The Epping facility will be an integral part of our supply chain, so having the right expertise and responsiveness from our partners is vital to achieving our objectives.”
The property is situated in the core industrial precinct of Epping within the Biodiversity Business Park, which is strategically located adjacent to the Hume Freeway and within close proximity to Melbourne’s wholesale fruit, vegetable and flower market, approximately 18 kilometres north of the Melbourne CBD, 31 kilometres north of Port Melbourne and 20 kilometres north-east of Melbourne Tullamarine Airport.
The focus of activity in the Northern industrial market has shifted over the years, due to the delivery of major road infrastructure, major government initiatives including relocating the Fresh Produce and Fruit Market to Epping, proximity to amenities and excellent road links between the inner and outer industrial markets.
CPIF Fund Manager, Mr Richard Mason, said “The land acquisition and development is in line with the Fund’s develop to core strategy by creating our own product to hold for the long-term through partnering with key tenant customers in meeting their industrial and logistics requirements. The development of this significant facility for Visy adds to CPIF’s high quality and resilient portfolio, whilst providing enhanced returns for our investors and increasing our pre-committed development pipeline to over $1 billion.”
CPIF now comprises 76 properties, with a WALE of 10.3 years, 97.2 per cent occupancy and resilient tenant covenants with 95 per cent leased to government, publicly listed or nationally/globally recognised tenants and a high weighting to consumer staples and essential services.