- Was purchased off-market for Charter Hall's Direct Industrial Fund (DIF4)
- Acquisition comes with a triple-net lease
- In the year to 31 December, the fund delivered a return of 21.2%
Charter Hall Group has announced the acquisition of SPC’s facility in Shepparton, Victoria for $66 million.
Purchased off-market for the Direct Industrial Fund No.4 (DIF4), the facility comes with a 30-year triple-net lease – a rare occurrence – with an initial passing yield of 6.1%.
The initial commencement rent will be $4 million with an annual rental review profile of the consumer price index plus 0.75%.
The facility is iconic given the company has roots in Shepparton that trace back to when the original SPC company was listed in 1912. It is the main food production, processing and distribution site in Australia, and is close to their Goulburn Valley growers.
Shepparton is about two hours north of Melbourne, near the New South Wales border.
The site has a gross lettable area of over 126,000sqm, sitting on a total site area of 23.4 hectares, equating to site coverage of 54%.
“We are delighted to be part of the SPC success story, and look forward to supporting SPC as its property partner,” said Sean McMahon, Charter Hall’s chief investment officer.
“We are proud to be associated with one of Australia’s most trusted and iconic brands in the food manufacturing and consumables sector.”
“DIF4 continues to meet investor demand for high quality exposure to the resilient and growing industrial and logistics property market,” said Steven Bennett, Charter Hall Direct CEO.
“The SPC acquisition is consistent with the Fund’s investment strategy, presenting a rare 30-year triple net lease, introduces a new tenant customer to the fund’s portfolio and enhances DIF4’s exposure to the non-discretionary food industry”.
“The acquisition will see DIF4’s WALE extend to 11.2 years, and maintains the fund’s 100% occupancy rate”.
CBRE’s Chris O’Brien, Ben Hegerty and Andrew Bell brokered the transaction.
Busy times for DIF4
During the six months to 31 December 2021, the unlisted DIF4 has deployed over $375 million in acquisitions. This has provided investors with access to many leading national tenants sic as Cleanaway, Tesla, Bunnings and the Federal Government.
In the year to 31 December 2021, the fund delivered a 12-month total return of 21.2%, with a current distribution yield of 5%.
The $2.5 billion fund is open for investment, and currently invests in industrial and logistics properties. It aims to provide sustainable, stable and tax advantage income with the potential for capital growth.
