Oxford Cold Storage building expansion war chest


Enormous Laverton North facility on the market as firm joins property sales trend

 

Oxford Cold Storage is taking advantage of investor keenness in refrigerated warehousing to underpin a major expansion plan.

Oxford has a 24 ha Laverton North site, with speculation alive that it may fetch $250 million.

Operations and marketing director Paul Fleiszig would not detail what the eventual proceeds would be spent on.

"We are going to retire some debt and we’re going to use some of that on expanding the business," Fleiszig tells ATN.

"We’ve got a number of opportunities and monetising the asset will allow us to look quite aggressively at those opportunities.

"The business requires us to move forward, there are a number of opportunities and we’re going to take those opportunities."

Fleiszig would not be drawn on whether it was looking at interstate assets.

Though the wider Oxford Logistics group has interests in warehouse technology and container storage, it appears any move will be related to its core refrigerated storage business.

The move will also represent a shift in management approach.

"I think we’ve taken the business probably as far as we can whilst staying under the radar," Fleiszig says.

"So I think we’ll have to bite the bullet and get more aggressive."

The property is being marketed as including a 20-year lease to Oxford.

The development comes on the day real estate firm CBRE releases its Industrial MarketView report for the last quarter of last year that notes the popularity of industrial properties with long leases with investors.

"Traditional logistics assets have always appealed to local investors due to their long lease profiles, fixed income growth and corporate tenant profiles.

"However, reports of strong returns in the Australian industrial market have attracted a growing number of offshore investors, which has boosted activity and added depth and confidence to the market," CBRE regional director, industrial & logistical services Matt Haddon says.

"As global capital markets become more familiar with the Australian industrial scene, sub-sectors such as refrigerated logistics and data centres have also become appealing and so the 'investable universe' is actually growing and creating a greater volume of opportunities than we have seen in recent years.

"With the knowledge that the market will bid aggressively for their assets, prospective vendors can go to the market with confidence and this factor is playing a significant role in fueling the healthy supply of investment grade product."

If the Oxford sale price speculation is realised, it will be on a par with food group Ingham’s divestment last year, the industrial portion of which returned $299 million last year.

CBRE says its research shows a rise in sale and leaseback transactions in last year, with owners looking to take advantage of market conditions to reinvest capital back into their core business.

"Investors looking for sale and leaseback opportunities are seeking quality buildings, strong covenants and lengthy WALEs [weighted average lease expiry ­profiles], particularly at the top end of the market," CBRE senior research manager Mark Lafferty says.

Meanwhile, the Australian Financial Review reports the Goodman Group and Brickworks are about to put on the market a 500,000 sq m refrigerated facility leased to Coles in Sydney’s Eastern Creek in the hope of attracting bids of about $200 million.

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