The Charter Hall managed Charter Hall Prime Industrial Fund (CPIF) has acquired a 50 per cent interest in the Arnott’s food production facility and distribution centre at 61 Huntingwood Drive, Huntingwood on a sale and leaseback for $198.9 million.

The other 50 per cent interest will be acquired by the ASX listed Charter Hall Long WALE REIT (CLW) as a tenancy in common interest.

The weighted average lease expiry (WALE) of 32 years and un-capped CPI plus 0.5 per cent rent reviews provides an attractive long term investment with inflation protection.

At a glance: 

• The Charter Hall managed Charter Hall Prime Industrial Fund (CPIF) has acquired a 50 per cent interest in the Arnott’s food production facility and distribution centre at 61 Huntingwood Drive, Huntingwood.
• Arnott’s has signed a 32-year triple net lease with multiple 10-year options.
• Post the acquisition, CPIF’s weighted average lease expiry (WALE) increases from 9.8 years to 10.7 years, underpinning the resilience of CPIF’s income stream.

Comprising a site area of 16.4 hectares and approximately 59,000 square metres of Gross Lettable Area, the property includes Arnott’s premier production site, generating the majority of Arnott’s products by volume and incorporates a modern high-quality food processing facility that contains a bulk materials receiving area, a large oven hall, chocolate room, packaging facilities and offices. 

Charter Hall Industrial & Logistics CEO, Richard Stacker, said it was a "delight" to welcome Arnott's as a tenant customer of Charter Hall.

"Arnott’s is the market leader in Australian biscuits, with a portfolio of iconic products that can be found in 95 per cent of Australian households commanding about 61 per cent share of the Australian biscuit market," he said.

“CPIF and CLW’s acquisition at $397.8 million (100 per cent interest) is one of the largest individual industrial asset sales recorded in Australia."

Arnott’s has signed a 32 year triple net lease with multiple 10-year options. Post the acquisition, CPIF’s weighted average lease expiry (WALE) increases from 9.8 years to 10.7 years, underpinning the resilience of CPIF’s income stream.

The property is strategically located in the core Huntingwood industrial precinct approximately 35 kilometres west of the Sydney CBD. The junction of the M4 and M7 motorways is approximately 3.5 kilometres to the west of the site giving excellent access to the Sydney Orbital Network.

Following the acquisition of the property, CPIF’s weighting to the strongly performing Sydney industrial market increases from 32 per cent to 35 per cent, and Arnott’s becomes one of largest tenant customers in CPIF’s portfolio along with Woolworths, Coles, Coca Cola and Metcash reflecting the resilient food and beverage customer base, with triple net leases in the portfolio increased from 20 per cent to 23 per cent.

CPIF’s $725 million capital raising, which closed significantly oversubscribed earlier this year, has given the Fund the capacity to fund its share of the Arnott’s property, the $100 million acquisition of Viridian Glass facility in Dandenong last month and a growing pre-leased development program expected to grow CPIF’s portfolio toward $7 billion.

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