Barings, Rest Snag $780m Goodman Industrial Portfolio

Barings, the US and global investment management giant, has acquired a $780-million industrial portfolio from the Goodman Group with assets in Sydney and Melbourne.

The joint acquisition with one of Australia’s biggest superannuation funds, Rest Super, includes 12 assets and 17 tenants across a total of about 70ha of land, and 340,000sq m of leasable space.

About a third of that space—115,000sq m—is taken up by leading wholesale grocery distributer Metcash, which leases one of the country’s biggest distribution facilities, in Melbourne’s west. 

That warehouse, with chiller and freezer areas and newly completed office space, is more than 700m long and equivalent to 15 football fields.

Other clients include Amazon, Super Retail Group, Pack Rack and Iron Mountain.

The deal between North Carolina-based Barings and Rest Super comes after the two picked up a prime asset in Truganina, 22km west of downtown Melbourne in November last year from Charter Hall Group’s Core Logistics Partnership Fund.

That 46,933sq m acquisition—for a reported $94.1 million—was used to seed a $1-billion portfolio partnership between Barings and Rest. 

Barings said the partnership’s newly acquired Sydney assets include a mix of functional single-tenanted and multi-tenanted industrial estates in core infill locations boasting strong market rental growth.

The Melbourne assets, meanwhile, are mostly newly complete or soon-to-be completed and feature leases to strong tenants.

▲ Goodman’s business park in Callister Place in Craigieburn, north of Melbourne—one of the dozen industrial assets in the portfolio deal. (Top image: Melissa Key, Charlotte Business Journal)

“The acquisition of this portfolio reflects Barings’ positive outlook for the industrial sector in Australia and aligns with our investment strategy of targeting to buy existing leased buildings with significant underlying land value at attractive pricing,” Barings executive director of real estate Shaun Hannah said.

“The newer, larger, longer leased assets are more likely to provide stable defensive cashflows and the shorter lease Sydney infill assets unlock the opportunity to improve the ESG features and capture rental reversion.”

Rest’s chief investment officer, Andrew Lill, said he expected the new industrial investments would add diversification benefits to Rest’s property holdings and deliver good long-term results for their two million members. 

“After investing successfully in the US industrial property sector and committing to a venture targeting the UK and Europe, we’re pleased to now increase our presence in the Australian market where there is continued strong demand for industrial property,” Lill said.

Barings, a subsidiary of Massachusetts Mutual Life Insurance Company, made its move into Australian commercial property in August of 2022, when it acquired real estate platform Altis Property Partners.