O-I Australia sells Charter Hall three warehouse investments for $214m

In a recent blog post O-I Australia said it has been increasing the recycled content within its products.

Owens-Illinois Australia has offloaded three warehouses with long leases to Charter Hall funds for a total of $214 million.

The deal comes a day after it was reported the glass maker’s local and New Zealand businesses sold to Visy for $733m.

O-I Australia produces glass for Ashahi/Schweppes, Bega, CUB, Lion and Simplot.

The vendor, which as part of that agreement retained the properties, then campaigned them off-market as investments.

A Sydney asset will be owned by Charter Hall Direct Fund No 4 (DIF4).

Factories in Melbourne (Google Street View image, top) and Adelaide – costing a total of $126m – will be held by Charter Hall wholesale funds.

The landlord has an impressive track record buying leaseback investments (the second half of this recent item about the $648m co-purchase of Aldi warehouses details examples).

The blended yield for the O-I Australia assets, sources say, is 5.4 per cent.

DIF4’s latest Sydney property

DIF4 is acquiring the Sydney warehouse, 130-170 Andrews Road, Penrith, for $88m.

A 20 year lease kicks in this month with Visy to pay fixed annual rent rises of three pc (story continues below).

The glass making plant services clients including Asahi/Schweppes, Bega, CUB, Lion and Simplot.

Charter Hall Direct chief executive officer Steven Bennett said the fund “continues to grow and meet investor demand or high-quality exposure to the resilient industrial property market.”

“This acquisition shows the strength of the Charter Hall Group acquisition pipeline, utilising the combined capacity of its suite of funds to secure properties not ordinarily available to retail, HNW [high net-worth] and SMSF [self-managed-super-fund] investors.”

Following this deal, DIF4’s weighted average lease expiry increases to 10.8 years, which the division’s fund manager, Miriam Patterson, described as “market leading”.

Being triple net structured, the owner isn’t responsible for ongoing costs relating to maintenance and upkeep, the executive added, of Penrith.

Melbourne and Adelaide properties to be held by Charter Hall wholesale funds

The Melbourne asset at 21 Simcock Avenue, at the south west corner of Booker St, Spotswood, is opposite what was until about 10 years ago an enormous art deco brick warehouse connected to the former Spotswood Pumping Station (which is now Scienceworks).

About nine kilometres from the city, the similarly large O-I Australia property is visible to commuters taking the West Gate Freeway on its decline approaching Williamstown Rd.

In West Croydon, between Adelaide and Port Adelaide, the glass maker disposed of 617-625 Port Rd.

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Marc Pallisco

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

Marc Pallisco