Home Property Australia Barings, Rest Super acquire $780m Goodman industrial portfolio

Barings, Rest Super acquire $780m Goodman industrial portfolio

  • May 15, 2024
  • by Property Australia
The assets are leased to global top-tier tenant covenants including Metcash, Super Retail Group, Pack Rack, Iron Mountain, and Amazon

Barings, one of the world’s largest diversified real estate investment managers, and Rest Super have completed a joint acquisition of an off-market premium industrial portfolio worth approximately $780 million from Goodman Group.

This significant acquisition comprises 12 assets and 17 tenants across c.70 hectares of underlying land and approximately 340,000sqm of total leasable area across Sydney and Melbourne.

The assets are leased to global top-tier tenant covenants including Metcash, Super Retail Group, Pack Rack, Iron Mountain and Amazon.

The portfolio includes the largest wholesale distribution centre in Australia, c.115,000 sqm mega shed in Melbourne’s west for Metcash.

This will be Metcash’s main distribution facility, an ambient warehouse with significant automation technology, a chiller and freezer area, as well as a modern new office.

This facility is over 700 metres in length and equivalent to the size of 15 football fields and will be the key cog in the Victorian operations of the grocery wholesaler and its network of IGA supermarkets.

Shaun Hannah, Executive Director, Real Estate at Barings said the acquisition reflects Barings’ positive outlook for the industrial sector.

“The newer, larger, longer leased assets are more likely to provide stable Barings-Corporate defensive cashflows and the shorter lease Sydney infill assets unlock the opportunity to improve the ESG features and capture rental reversion.”

The Sydney assets comprise a mix of functional single tenanted and multi-tenanted industrial estates well located in sought after core infill locations experiencing strong market rent growth. The Melbourne assets are mostly newly complete and soon to be completed assets located in premium locations with modern sustainability features and long leases to strong tenant covenants in place.

Barings and Australian superannuation fund Rest Super last year announced a $1 billion industrial property partnership, purchasing their first industrial asset at Saintly Drive Truganina in Melbourne.

Andrew Lill, Chief Investment Officer, Rest said the group is expanding its exposure to industrial investments in Australia.

“After investing successfully in the US industrial property sector and committing to a venture targeting the UK and Europe, we’re pleased to now increase our presence in the Australian market where there is continued strong demand for industrial property.

“We’re confident about our plan to continue investment in industrial property with Barings. We believe there’s value in purchasing well-located industrial assets and we expect rents to increase materially over time.

“We expect that the new industrial investments will add diversification benefits to Rest’s property holdings and deliver good long-term results for our 2 million members.”

A Property Council report from February shined a light on the importance of industrial assets revealing that a staggering $1.2 trillion worth of goods flow through Australia’s ‘big sheds’ every year.

The report by Oxford Economics Australia, commissioned by the Property Council of Australia, estimates 38 per cent of household consumption in FY22, totalling $423 billion, was from goods passing through industrial assets like warehouses, manufacturing facilities and distribution centres.