GPT to acquire 3 Industrial Assets from Charter Hall

It has been reported that GPT will acquire 3 Victorian industrial assets from Charter Hall in a deal worth approx $130m.

GPT are set to acquire a cold storage facility and two warehouses within the 90-hectare Drystone Industrial Estate in Truganina which is being developed by the Charter Hall-managed Core Logistics Partnership, (which is backed by Victorian Funds Management Corporation and Telstra Super) and joint venture partner the Commercial & Industrial Property group.

The deal is reported to have been struck on a passing yield of 4.2 per cent.

The Drystone Industrial Estate is strategically located in one of Melbourne’s prime industrial and logistic hubs, close to key motorways, the CBD and Port of Melbourne.

The estate currently comprises;

• A Woolworths automated meat processing cold store facility consisting of a 24,895sqm warehouse and office building fronting Dohertys Rd. The purpose built facility was completed in 2015.
• A 63,320sqm regional distribution centre and three story office leased to Target
• A purpose built 37,863sqm regional distribution centre and office for The Reject Shop.
• A 16,557sqm partly ambient, partly chilled, partly frozen purpose built facility for RAND
• The estate also includes facilities for Victoria Freight Specialists and Couriers Please

A surge in industrial land development in Melbourne west has left some concerned about the long term vacancy risk and low rental growth prospects.

According to JLL’s latest Industrial Market Outlook, Melbourne has seen an elevated level of leasing activity despite COVID, with 303,400 sqm of gross take-up recorded over the past quarter. This is higher the quarterly average over the last two years (261,500 sqm).

The West precinct has however seen prime rental growth of just 0.8% in the last 12 months as compared to 1.9% in the South East and 0% growth in the North.

JLL expect that 2020 will record the biggest addition to stock to the Melbourne market since JLL began tracking it, despite prevailing economic headwinds, however they note that pre-commitment rates are running at circa 80% for these projects, which will mitigate some concerns regarding vacancy risk over the short term.