Charter Hall spends $141m on pie factories

The Bairnsdale factory covers a low 28pc of the 21.2ha site.

Charter Hall is paying $141 million for two Victorian manufacturing facilities leased to Patties Foods.

The deal includes the Bairnsdale factory where Four’N Twenty pies are produced.

The Melbourne property is walking distance to Pakenham train station.

The other asset, in Melbourne’s south east Pakenham, creates Nanna’s products, amongst other things, and acts as a distribution centre.

This property is also walking distance to the train station and opposite residential.

Patties offered the investments with a 30 year leaseback.

Based on the combined commencing annual rent ($6.25m), the sale price reflects a 4.4 per cent yield.

JLL’s Tony Iuliano and Andrew Rowse with Charter Keck Kramer’s Andrew Grant represented the vendor.

Charter Hall racks up $10b of leaseback deals since 2015

The Patties properties will be held by Charter Hall Direct Industrial Fund No 4 (DIF4) – a $1.5 billion vehicle open to investors with a minimum $20,000.

Charter Hall chief investment officer, Sean McMahon, said the group has outlaid more than $10b on leaseback real estate since 2015.

Last year, with Allianz Real Estate, it spent $929.4m on six Aldi-backed industrial properties (these are controlled by the Charter Hall Prime Industrial Fund).

The manager has also bought assets from Arnotts, Beacon Lighting, Coca Cola Amatil, Coles, Inghams, Metcash (which controls the IGA brand) and Woolworths.

Ten months ago, for DIF4, it paid Visy $214m for facilities in Adelaide and Melbourne.

In late 2020, Charter Hall purchased a north Melbourne site to construct then hold a c$55m distribution centre, also for this occupier.

“Charter Hall through its strong relationships with leading corporate tenants in Australia continues to be dominant in the sale and lease back segment, unlocking exclusive opportunities for our investors,” according to Mr McMahon.

“We actively seek out properties leased to tenants in the consumer staples and food logistics sector because our investors consistently tell us that they value the defensive and stable cashflows these properties generate over the long term,” the executive added (story continues below).

The Patties factories

Patties’ triple net lease allows for fixed three pc rent rises.

The 23,791 square metre Bairnsdale facility spreads over just 28pc of the 21.2ha site.

The Melbourne property – containing 22,384 sqm – sits on a 5.46ha parcel.

Combined, offices comprise 10.2pc of the (46,175 sqm) total lettable area, which is above average.

“Patties Foods Group is one of the largest pie manufacturers in the world, producing some of Australia’s most iconic, market-leading brands, including Four’N Twenty, Patties, Herbert Adams, Bocastle, Nanna’s, Rustic Foods and Fitness Outcomes, for domestic and global export,” Patties chief executive officer, Paul Hitchcock said.

“The sale and leaseback is part of the business’ future growth strategy,” he added.

“Both facilities are critical to Patties Foods’ operations and this arrangement enables the company to invest in additional growth opportunities to support our people, business and brands,” according to the executive.

“The business has recently entered new categories via acquisition, and we are now in a position to continue this expansion”.

DIF4

The acquisitions will see the DIF4 Weighted Average Lease Expiry rise to 12.3 years, which is market leading.

Occupancy is 99.9pc.

The manager is presently distributing a 5.9pc annual return to investors.

The fund has the capacity to grow to over $2b, Charter Hall Direct chief executive officer Steven Bennett added.

Share or Recommend article

Marc Pallisco

A former property analyst and journalist, Marc is the publisher of realestatesource.com.au.

Marc Pallisco