Qube's Moorebank hub hits milestone

The development of Australia’s largest intermodal freight hub – Moorebank Logistics Park (MLP) in Sydney’s Southwest – is on track, according to Qube Managing Director, Maurice James.
As of this month, the developer has reached an “in-principle agreement” with a second tenant for warehouse space, with the client reserving 150,000m² of land at Moorebank for development up to seven years, according to Australian Financial Review. Last year, it secured commitments from Target Australia and Qube Logistics, representing a commitment of 80,000sqm, or just 10 per cent shy of its total warehouse capacity.
The developer is confident there will be continued traction with tenant interest in warehouse space at MLP, but they will be “selective” in their choice of tenants, focusing on securing tenants that drive “significant volumes” of containerised freight.
“We are delighted with this arrangement with what we expect will be a long-term client of the MLP”, said James. “This agreement highlights the substantial flexibility that Qube has to structure arrangements with prospective tenants that meet their particular requirements without adversely impacting the commercial returns from the project.”
Despite the complex nature of the MLP planning process – which involves Commonwealth entity Moorebank Intermodal Company (MIC), in addition to multiple NSW state agencies – Qube has stated that the precinct development is keeping to timeline.
The company has reported that the construction of the precinct infrastructure and stage 1 of the import-export (IMEX) rail terminal is underway and that operations are “on track” to “commence in the first quarter of calendar 2019”. They also gained planning approval in late January 2018 for Moorebank Precinct East – Stage 2, which was a key requirement to enable the timely construction of the initial warehouses.
Qube is expecting significant long-term earnings with the MLP development, however, has pointed out their focus is on “substantial value creation rather than short term earnings”. The developer reported a decline of 5.4 per cent to the interim net profit, with a total of $45.2 million after tax.
James said that Qube had performed a “solid first half,” having finalised major tenant agreements for Moorebank and secured an interim dividend of 2.7 cents per share.
While the developer is confident that they will deliver an increased underlying net profit after tax for the latter part of the 2018 financial year, the continued achievement of milestones required for the operation of MLP in the first quarter of 2019 is dependent on New South Wales planning approvals and the receipt of these required approvals from MIC.