Charter Hall’s Core Logistics Partnership acquires prime $70 million Bunnings site

The Charter Hall managed Core Logistics Partnership (CLP) has acquired a Bunnings leased asset at 520-530 Gardeners Rd, Alexandria, in the tightly held prime South Sydney precinct for a price of $70 million via an off-market acquisition.

The strategically located 1.9ha site in the tightly held Alexandria/Mascot industrial and logistics precinct provided the opportunity to secure an income generating land bank, with a remaining lease term of 4 years.

Bunnings has operated a Bunnings Warehouse store on the site for 20 years, however Charter Hall has negotiated a surrender package with Bunnings who no longer need the facility.

The property is located on the corner of Gardeners Road and Bourke Road approximately 6km south of the Sydney CBD, 2.5km from Sydney Airport and 6km from Port Botany. The site is also close to the St Peter’s Westconnex Interchange which, when opened in 2023, will link Sydney’s two major freeway’s – the M4 and M5. The area’s gentrification with large parcels of land being rezoned from industrial to high density residential and mixed use is creating a shortage of well-located industrial/commercial land.

CLP Fund Manager, Mr Simon Greig, said, “The property provides excellent redevelopment options including the ability to develop a high-profile logistics or last mile facility under the current zoning. South Sydney is one of the most sought-after industrial precincts in Australia given the access to major transport hubs, the Sydney CBD, port, airport and surrounding densified residential precincts.

“This acquisition is aligned with CLP’s strategy to replenish its development landbank and grow its Sydney portfolio. It will capitalise on strong demand for industrial and logistics facilities in the South Sydney area” said Mr Greig.

Mr David Harrison, Group Managing Director and CEO of Charter Hall Group commented “This off market acquisition and the relationship with Bunnings has allowed us to access a fantastic high profile corner site with multiple development options. We now own an industrial and logistics portfolio exceeding $11 billion leased to more than 140 tenant customers, which combined with one of the largest pre leased development pipelines in Australia exceeding $1.5 billion, Charter Hall will continue this 13 year strategy to expand our market share of the prime logistics sector for the benefit of our investors.”

Charter Hall was introduced to the opportunity by Josh Charles of One Commercial.

Charter Hall Core Logistics Partnership now comprises 38 industrial and logistics properties valued at approximately $2 billion, with a WALE of 9.3 years, and benefits from average annual rent increases of 3.0 per cent and 99.7 per cent occupancy.