Barings Picks Up Vic Logistics Centre to Seed $1bn Portfolio

A major industrial holding in Victoria and the fulfillment centre of Catch.com.au has changed hands for $94.1 million as an investment heavyweight gets a $1-billion portfolio under way.

Real estate investment manager Barings picked up the prime asset at Truganina, 22km west of the Melbourne CBD, from Charter Hall Group’s Core Logistics Partnership fund with a passing yield of 4.7 per cent. 

Barings will use the 46,933sq m asset to seed a $1-billion portfolio in partnership with superannuation fund Rest. 

Charter Hall plans to use the funds to redeploy capital into its development pipeline, specifically its first inner-city, multi-level warehouse called Ascent on Bourke, which is planned for Sydney.

Baring’s new asset, at 2-30 Saintly Drive, Truganina has multiple warehouses tenanted by the major online retailer Catch.com.au, owned by Wesfarmers within the Kmart Group.

The other major tennant ia Efflog Operations, a specialised third-party logistics provider. Together the tenants create a 2.4 year weighted average lease expiry. 

Charter Hall fund manager Simon Greig said they had acquired the property for $41.7 million in 2015, and that the sale was all part of their value creation strategy.

“With a significant development pipeline in place, this sale enables us to unlock capital that will be recycled into new opportunities for growth and drive greater returns for our investors,” Greig said.

▲ Due for completion in 2024, Ascent on Bourke is already 80 per cent pre-leased with Schindler and Coles Group two of its pre-committed tenants.

Barings investment management director James King said since the acquisition of Altis last year, it now had more than $6.3 billion in Australian real estate assets across 49 properties.

“Notwithstanding the current economic environment, we remain attracted to industrial real estate in Australia on a long-term basis,” King said. 

“Our ambition is to continue to seek out both development and value-add opportunities across the major metropolitan markets of Australia.”

Rest chief investment officer Andrew Lill said they were seeking more exposure to industrial assets by leveraging the expertise of Barings. 

“The industrial investments made through the venture will further diversify Rest’s property investments and improve investment outcomes for our members,” Lill said.

The transaction was brokered by Tony Iuliano of Cushman & Wakefield.