Coles Group has pre-committed to two high-tech distribution centres at Charter Hall Prime Industrial Fund (CPIF) owned estates in Melbourne and Sydney.
The agreements, for a combined lettable area of 60,000 square metres, come six months after Charter Hall Group reset and extended leases to the same tenant, affecting Adelaide and Perth warehouses measuring a total of 149,594 sqm.
Charter Hall Industrial and Logistics chief executive officer Richard Stacker said the new east coast projects – both with approximately 30,000 sqm of internal area – are a result of a cross-sector relationship with the tenant (the Group owns four warehouses and 34 supermarkets rented to Coles).
The executive added Charter Hall Group now has an industrial and logistics development pipeline worth $1 billion. Upon completion of its Coles fulfilment centres, its industrial and logistics investment portfolio will be valued at more than $10b.
CPIF – which has a portfolio worth about $5b – will see its WALE [weighted average lease expiry] extend to “a sector leading” 11 years once the facilities are tenanted in 2022.
Coles chief property officer Thinus Keeve said the two new warehouses would enable Coles Online to offer a greater range and availability. It would also significantly increase the supermarket’s capacity for growing demand.
Another coup for Melbourne’s Midwest Logistics Hub, while in Sydney, Coles chooses Wetherhill Park
In Melbourne, the Coles fulfilment centre is earmarked for part of the 58-hectare Midwest Logistics Hub at 500 Dohertys Road, Truganina, 23 kilometres west of town.
Charter Hall Group only acquired the block making way for the business park in 2018.
As well as the Coles commitment, the Group confirmed Bridgestone as an occupier: the tyre maker pre-leasing a 25,000 sqm facility for 10 years.
Earlier this year, clothing retailer Uniqlo pre-committed to a 46,000 sqm factory, while last year, Toll on behalf of Mars Wrigley, signed a rental agreement for a 44,000 sqm warehouse.
In Sydney, the Coles factory will anchor part of a 14ha estate at Horseley Drive, Wetherill Park.
Charter Hall managing director and group chief executive officer David Harrison said the pre-commitments enhance and diversify the quality of logistics assets held by its industrial fund.
“The ongoing growth of ecommerce and the focus on supply chain efficiencies continues to drive… demand for well located, high quality logistics facilities,” Mr Harrison said.
“Charter Hall has demonstrated, via expanding our relationship with Coles, that our industrial estates located near major transport infrastructure continue to be well sought after by our major retail and logistics customers”.