Charter Hall Take Up Arnotts Huntingwood Estate Offer

12 December 2019

Charter Hall have acquired Arnott's manufacturing site in Huntingwood, Sydney for $ $398.9 million, representing a passing yield of 4.5%.


The Charter Hall Prime Industrial Fund and the Charter Hall Long WALE REIT will each acquire 50% in the facility which is 100% leased to Arnott's on a triple net basis with term of 32 years.


The facility is located approximately 35km west of the Sydney CBD, in close proximity to the major distribution centres for Woolworths, Coles, Metcash and Aldi and is Arnott's primary manufacturing site, producing the majority of its top 20 products including the three leading brands; Shapes, Tim Tam and Jatz.


Speaking of the transactions, Charter Hall's managing director and group chief executive, David Harrison said, "I think the common thematic here is we have got a very broad and largely diverse range of equity that wants to be invested in good quality real estate from wholesale, large super funds and pension funds through to the listed REITs we manage through to the direct business we manage, and the thematic with all of them is that no matter what industry they're in, they usually the No. 1 or No. 2 most dominant," .


The triple net lease structure makes Armott's responsible for all outgoings, repairs and maintenance, and capital expenditure and an uncapped CPI plus 50bps rental increase over the term.


Avi Anger, Fund Manager of Charter Hall Long WALE REIT (CLW), said "the addition of these triple net leased properties increases the proportion of triple net leased properties in the portfolio to 46 per cent."


CBRE and UBS Australia had been appointed to run a sale process for 3 of the Arnotts facilities by KKR, owner of the Arnotts brand. The other two Arnotts facilities were acquired by Centuria.