Charter Hall makes tactical Boronia play

Nine years ago, GSK sold a 7.3ha piece (outlined) of the Boronia holding.

Charter Hall is paying $106 million for a life sciences building on 16.8 hectares in Melbourne’s east Boronia.

The vendor, GlaxoSmithKline, offered the property, 1061 Mountain Highway, on the corner of Colchester Road, with a 2.3 year leaseback.

Charter Hall has acquired the Boronia site with plans for a pharmaceutical manufacturing and business hub. Image: Google Street View.

A 33,878 square metre improvement – with an office, manufacturing plant and temperature controlled warehouse – occupies just 20 per cent of the land.

The deal comes nine years since the pharmaceutical giant sold a subdivided 7.32ha tract which has since made way for industrial product.

Charter Hall will hold its property in the $7 billion Prime Industrial Fund (CPIF).

Tactical purchase

GSK announced it would quit the Boronia facility last October after 50 years of occupation.

The property is its largest manufacturing plant in the southern hemisphere.

Upon obtaining vacant possession, Charter Hall intends to reposition the structure and develop the rest of the site as a pharmaceutical manufacturing and business hub (story continues below).

Earlier this month, CPIF spent $269.4m for 25 cold store and food distribution centres leased to PFD.

“In parallel, we will investigate other employment related uses in this zone that will compliment this precinct,” the manager’s chief investment officer, Sean McMahon said.

Last year, CPIF paid ALDI $929.4m for six distribution centres.

“This [asset] increases our exposure to the rapidly growing life sciences sector and is a further demonstration of our ability to work with corporates to deliver efficient solutions to their property requirements”.

Fund manager Richard Mason added “the acquisition is line with CPIF’s strategy to increase its geographical exposure to core eastern seaboard markets, being one of few opportunities of significant scale in the tightly held eastern Melbourne industrial market where prospects for rental growth are considered strong and historical trend for valuation growth has typically outperformed the broader industrial market”.

The trust now holds 80 properties and a committed development pipeline worth c$780m.

Investors include superannuation groups, global pension and sovereign wealth funds and insurance companies.

Last August, Charter Hall struck a deal with the Clean Energy Finance Corporation to improve the portfolio’s Environmental, Social and Governance (ESG) credentials.

CBRE’s Chris O’Brien, Ben Hegerty, Rory Hilton and Singapore based Andrew Bell sold 1061 Mountain Hwy.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of