UniSuper Pays $260m for Victorian Industrial Plot

UniSuper, the $124-billion superannuation fund, has snapped up a 66ha greenfields development site in Melbourne’s west.

The seventh biggest super fund in Australia paid $260 million for the site in Deer Park, 15km west of the Victorian capital’s CBD, and immediately announced it would look to develop prime logistics and warehouse capacity.

Orica, the Australian-based multinational that began supplying explosives to the Victorian goldfields 150 years ago, off-loaded what it described as about half of its “total surplus land holdings at Deer Park”.

Publicly traded Orica is one of the world’s biggest providers of commercial explosives and blasting systems to the mining, quarrying, oil and gas industry.

The net profit after tax from the sale is reportedly about $173 million.

UniSuper said the acquisition, which potentially can house more than 330,000sq m of logistics and shed space, will take its unlisted property holdings to $8 billion.

The fund said it expected to go that route, providing industrial accommodation in “the increasingly-constrained West Melbourne industrial precinct”.

▲ UniSuper says it will look to develop prime logistics and warehouse capacity on its new asset.

Property group GPT negotiated the deal as part of a circa $3-billion direct property mandate it has with UniSuper. Together with property developer HB+B Property, the three companies intend to progressively develop the site, with a forecast end value of more than $1 billion.

Infrastructure and civil works for the planned industrial estate are expected to begin shortly.

UniSuper senior manager for property Nick Stephens said the transaction highlighted the fund’s ability to secure high-quality property investments.

“This super prime parcel of industrial land further improves the quality of our diversified unlisted property portfolio and adds to our exposure to the logistics and warehousing sector,” he said.

In an announcement to the Australian Securities Exchange (ASX) Oricon said the after tax net profit of $173 million would be recognised as an “individually significant item” in half-yearly results.

“The remaining surplus land at the site (Stage Two) is expected to be offered to the market in the future, pending the completion of remediation activities, securing approvals from relevant authorities, and supportive market conditions,” the announcement said.