Charter Hall, PGGM Go Large on Logistics

Charter Hall and global pension fund giant PGGM have secured a logistics asset in Melbourne following a string of deals, as the pair eye an $800 million logistics portfolio.

The logistics partnership announced it nabbed a Melbourne industrial asset for $87 million on Wednesday, with the latest buy notching up its portfolio value to $300 million across seven assets since forming last year.

The Netherlands-based pension investor PGGM manages assets worth €246 billion.

Due to a surge in demand for warehouse space, booming e-commerce and a renewed focus on supply chains, the industrial and logistics sector has remained robust and relatively unscathed by the impacts of the pandemic.

E-commerce is underpinning Australia’s industrial market, with leasing demand expected to continue in the sector into 2021.

The Charter Hall-PGGM partnership’s latest acquisition, a prime industrial investment in Melbourne, was secured on a 20-year sale-and-leaseback deal.

It adds to the pair’s $207 million brownfield Minto acquisition in Sydney, also purchased in a 50-50 joint venture with Charter Hall’s prime industrial fund.

The portfolio also includes the pair’s recent purchase in Sydney’s Kingsgrove, together with several long-leased assets to Ingham’s which have been completed.

Related: US Retail Giant Touches Down in Western Sydney

Charter Hall chief executive David Harrison said the Melbourne acquisition takes the partnership’s portfolio to seven assets and a 13-year WALE.

“The industrial and logistics sector is undergoing a long-term structural up-cycle driven by significant growth in online retailing and the need for on-going supply chain efficiencies,” Harrison said.

“Most institutional investors are significantly underweight within the industrial and logistics sector and wish to increase their exposure to the strongly performing sector.”

“Consequently, those groups with a capacity to source acquisitions on and off-market, develop to core capability and most importantly, possess the scale to meet tenant customer needs across multiple geographies and sectors, will be able to deliver the outcomes our investors seek in a highly competitive market.”

Further north, last month Charter Hall announced it fully leased its $115 million TradeCoast Industrial Park estate in Pinkenba, Brisbane, after signing leases with Amazon and Australia Post as it rides the e-commerce wave.

Last month, Amazon announced plans for a new 37,000sq m fulfilment centre, committing to a Dexus-managed industrial estate in the western suburbs of Melbourne.

Amazon’s latest fulfilment centre, located in Ravenhall, will join its 24,000sq m facility in Dandenong South, owned by Melbourne’s Pellicano family.