Charter Hall invests $115m on Erskine Park warehouse with long lease

The Erskine Park asset includes about 3000 square metres of high quality office space over two floors.

Charter Hall has paid $115 million for a modern logistics centre with a long-lease that hasn’t even kicked in yet, in Sydney’s Erskine Park.

The off-market deal for 40-66 Lockwood Drive reflects a 4.75 per cent return.

On 8.3 hectares, the property will be held by the Charter Hall Prime Industrial Find (CPIF).

Developed in 2008 by vendor Kador Group, it includes a distribution centre with 40,000 square metre of warehousing, accessed from two truck access driveways, and with super awnings on two sides.

The structure also contains a 3000 sqm office.

Even including a large open-air car park, the factory occupies just 52pc of the land parcel.

Erskine Park suburb is about 42 kilometres west of the city.

Winc a new Charter Hall industrial customer

Office product supplier Winc entered a 12 year lease for the Lockwood Drive property set to kick in when its current rental agreement expires this August.

Each year after that, it will pay 3.25pc more with a (mid-term market) review to take place in 2026.

The facility was built for the tenant, previously known as Staples and Corporate Express, as its national distribution centre.

Winc is a new customer for Charter Hall’s industrial and logistics platform.

The landlord’s industrial and logistics chief executive officer, Richard Stacker, said “the acquisition of Winc’s Erskine Park facility is consistent with both the Group’s and Funds’ strategy to acquire core logistics properties leased to good quality tenants on long term leases situated in key industrial precincts with access to major infrastructure and transport networks.”

“We were able to acquire the property off-market via Savills, Michael Fenton, further evidencing our track record for securing both off-market and on-market prime long WALE [weighted average lease expiry] assets,” the executive added.

“Our $10 billion industrial and logistics portfolio continues to grow via a $1.3b pre-leased development pipeline and selective acquisitions and is now 90pc located on the eastern seaboard”.

CPIF fund manager Richard Mason, said the deal “provides a rare opportunity to secure a major logistics facility in the tightly held Western Sydney growth corridor that is supported by convenient access to M4 & M7 Motorways and major infrastructure projects underway including the Badgerys Creek Aerotropolis.” 

Fund manager for Direct Property, Miriam Patterson, added the purchase “enhances the quality of DIF4’s growing industrial portfolio which is approaching $800m with a portfolio WALE of circa 10 years”.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco