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ASX-listed fund manager Charter Hall has taken the value of its industrial property partnership with Dutch pension fund giant PGGM to $560 million after buying a 1.56-hectare last-mile logistics site in Bowen Hills, north-east of the Brisbane CBD.

The partners, which are undertaking due diligence on their $1.3 billion takeover proposal of real estate investment trust Irongate, paid $60 million for the expansive property at 66-98 Montpelier Road on a yield of 4.4 per cent.

Comprising four buildings and 9,534 square metres of gross lettable area, the site sold on a weighted average lease expiry of 4.4 years. Tenants include Sime Darby, Tradelink, Mine Site Technologies, Corporate House Services and ASX-listed National Storage.

During the last apartment boom in Brisbane, Metro Property Development had proposed a mixed-use development of up to 550 apartments on the site, before offloading it for about $25 million in 2016 to office park developer OPD.

In 2017, OPD submitted a proposal for a mixed-use office and retail precinct of four buildings set around a central plaza.

Charter Hall and PGGM have now taken on the mantle of developing the well-located site, which lies just 2.5 kilometres from Brisbane’s CBD,

“This Bowen Hills property is a strategic inner brownfield asset surrounded by high-quality residential and commercial uses and has potential to be developed into higher and better uses in the medium term,” said Charter Hall chief investment officer Sean McMahon.

“This site is also well positioned for last mile or multi-level strategies in the future, providing multiple redevelopment scenarios.“

Real estate firm Blue Commercial brokered the off-market sale.

The Bowen Hills acquisition follows Charter Hall lifting its operating earnings guidance for the 2022 financial year for a third time last week, after releasing its half-year results.

The group, which has $80 billion of funds under management, forecast operating earnings per share guidance of no less than 112¢ this financial year, up from the 105¢ it gave in December.

Industrial property, which is booming thanks largely to the acceleration of e-commerce during the pandemic, has become a major driver of growth for Charter Hall, which is led by David Harrison.

Since commencing in 2019, Mr Harrison said the PGGM Industrial Partnership (CHPIP) had consistently invested in high land-rich assets with excellent redevelopment prospects and strong market fundamentals in each location.“


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