Bega hoping for $150m for 99-year-old Vegemite factory
Bega Cheese plans to cash in on strong demand for well-located industrial property by selling its near 100-year-old Vegemite factory in Port Melbourne for about $150 million.
ASX-listed Bega will lease back the 36,915 square metre facility at 1 Vegemite Way to the new owner, giving the food company the ability to funnel the proceeds of the sale back into its business.
The property, where arguably Australia’s best-known food brand has been manufactured since 1923, was transferred to Bega in 2017 as part of its $460 million deal to buy Vegemite and other Australian grocery products from Mondelez International (previously called Kraft Foods).
At the time, the Vegemite factory was valued at less than $90 million.
Should Bega secure a buyer, the company will continue to manufacture Vegemite and other products at the site under a long-term lease arrangement.
Sale and leaseback of industrial facilities has become increasingly popular amid a surge in demand for prime logistics assets from local and offshore institutional investors.
In June 2020, Aldi sold four distribution centres offering seven-year leaseback agreements to Charter Hall and global investor Allianz Real Estate for $648 million on a 4.75 per cent yield.
Also in 2020, Charter Hall acquired three glass-bottle manufacturing plants from Owens-Illinois in a leasing deal with Rich Lister Anthony Pratt’s Visy group, while last year Charter Hall acquired two Patties Foods factories in Victoria for $141 million in a 30-year sale and leaseback deal.
Bega has appointed Jack Kelliher, Sean Thomson and Gavin Bishop from Colliers as exclusive selling agents and law firm Addisons is acting as advisor.
The Port Melbourne facility occupies a 6.34-hectare island site in the Fishermans Bend urban regeneration precinct, about 5 kilometres from the Melbourne CBD.
Selling agents Colliers said the site’s immediate proximity to the Port of Melbourne underpinned the investment opportunity alongside its premium last-mile logistics location given 99 per cent of Melbourne’s population is accessible via a one-hour drive.
Longer-term it has potential as a future development site.
