Charter Keck Cramer (Charter) has acted as Property Advisor and Transaction Manager to Allied Pinnacle for the Sale and Leaseback of 10 industrial properties to Qualitas.
Qualitas, an Australian real estate investment management firm, purchased the portfolio for circa $400 million, which represents a sub 6% yield on the commencing rent. The sale to Qualitas’ Food Infrastructure Fund is another example of an emerging buyer profile where a local investment manager with varied and often international passive capital combine as the purchasing entity.
The ten properties across Victoria, New South Wales, Queensland, Western Australia and South Australia comprise a total of almost 130 Hectares of freehold land in inner city, suburban and regional locations that were sold subject to eight x 30 year lease holdings and two x 15 year lease holdings.
The operational improvements relate to purpose built milling, mixing and bakery facilities which will be occupied by Allied Pinnacle, the market leader in the manufacture of flour, prepared bakery products, and bakery ingredients, supplying 40%* of Australia’s flour for human consumption.
Allied Pinnacle was recently formed through the merger of Allied Mills & Pinnacle Bakeries, both Pacific Equity Partner owned businesses.
“Charter helped us identify the Allied Pinnacle sale and leaseback opportunity during our acquisition due diligence and subsequently advised us at each stage of the process to successful completion of the transaction, their experience and independent perspectives added significant value throughout.” Said Matt Robinson, Director at Pacific Equity Partners
Whilst the sale of such a large industrial portfolio is unique to the Australian property market, it forms part of a continued sale and leaseback trend within the commercial property market in recent years. The strategy has been particularly prevalent within the manufacturing industry where operational infrastructure and also location make it often unfeasible to consider relocation, thereby presenting the option for the provision of longer term lease commitments.
“Whilst strong current market conditions prevail, corporates are increasingly considering the release of often significant capital tied up in the real estate, whilst continuing to operate uninterrupted for the medium to long term. Recycling the sale proceeds to generate business profits at a multiple in addition to the sale yield is attractive to business owners and investors.” said Andrew Grant, National Executive Director at Charter Keck Cramer.
“Large portfolios continue to be well sought after by investors, providing instant scale, expedited timing to reach a targeted funds under management, geographic spread and management efficiencies. We’re in an environment where there is so much capital chasing deals that even at this higher capital value range there is still incredible demand from investors. A key factor in the appeal of any sale & leaseback is the strength of covenant, which in this instance we were able to easily demonstrate given the strong financial track record and long-standing history of the Allied Pinnacle business.” said Clint Jellis, National Executive Director, Charter Keck Cramer.
Adding to the attractiveness of the Allied Pinnacle portfolio was the opportunity to obtain significant exposure to the emerging Agri Logistics sector, whilst enquiry through the campaign was heightened as there has been a reduced level of opportunity in the market with fewer assets being offered for sale.
Charter Advisory is an independent and highly experienced team providing evidence based, outcome driven property solutions. Charter can analyse, identify and implement tailored property solutions that respond to clients’ needs and deliver maximum value. Clients can have confidence that Charter will identify every market opportunity available and that our clients best interest is our absolute priority. Charters’ independence is your asset