Charter Hall Retail Management has purchased a $111.8 million or 52 per cent interest in a $215 million high quality purpose-built distribution facility fully leased to Coles for 14.5 years.
The distribution facility is located in the Adelaide’s prime industrial precinct of Edinburgh Park, South Australia, approximately 25km from Adelaide CBD and is utilised by Coles as its sole distribution centre to service all of its retail stores in South Australia and the Northern Territory.
The property has been owned by a Charter Hall partnership between three funds. Charter Hall’s Retail Management (CQR) equity investment post settlement on Wednesday July 8 for the 52 per cent interest is approximately $60 million, given there is existing asset level debt.
The major 52 per cent ownership fund reached the end of its defined investment term, providing a mutually beneficial opportunity for the CDC syndicate investors to exit, whilst providing Charter Hall a resilient exposure to logistics, leased to one of its major convenience retail customers in Coles.
The remaining 48 per cent interest continues to be held by two Charter Hall Direct managed funds.
Charter Hall Retail REIT’s CEO, Greg Chubb said the acquisition continues CQR’s longstanding partnership with Coles, one of its leading Major tenants.
“This acquisition increases the certainty of income through a long 14.5 year lease, provides growth for CQR investors through fixed rental escalations, and improves the resilience and security of income by further increasing CQR’s exposure to Coles,” he said.
“Today’s acquisition fits in our Long WALE Retail property category and is consistent with CQR’s strategy is to be the leading owner and manager of property for convenience retailers.”
According to Qanstruct, the modern and efficient facility comprises ambient, temperature controlled, chiller and freezer areas, security storage and offices. Its design takes into account a nearby heritage area and incorporates numerous innovative features.
It comprises ambient storage for dry goods, temperature controlled rooms for fine wine and chocolate, security storage cages for cigarettes, perfume and other high-value items, and specially designed chiller (2ºC) and freezer (-25ºC) chambers for chilled and frozen foods.