Charter Hall checks into GSK complex
Property fund manager Charter Hall has snapped up GlaxoSmithKline’s life sciences campus at Boronia in Melbourne’s east through a $106 million deal as the pharmaceuticals giant prepares to shut down its operations at the site and depart in late 2023.
The facility is used by GSK as its Australian manufacturing hub for high-volume respiratory products. The deal was struck on a yield of about 4 per cent and GSK will lease back the property for 2.3 years on triple net terms from settlement, with annual CPI reviews.
Charter Hall will hold the property in its $7 billion wholesale industrial and logistics fund, CPIF. The 16.8 hectare site includes 33,878 sq m of pharmaceutical facilities with warehouse space, a corporate office and laboratory accommodation.
Across a large land holding and with low site coverage (just one fifth of the site is developed) there is plenty of scope for further redevelopment and additional income.
While the Boronia property is held within Charter Hall’s industrial portfolio, managing director David Harrison said the acquisition fitted in well with the ASX-listed fund manager’s increasing exposure to the broad and growing social infrastructure thematic. Under that rubric, Charter Hall holds investments in childcare centres, bus depots and police and justice services facilities.
“We think the life sciences sector is really going to boom in Australia as it has in the US and the UK,” Mr Harrison said.
The transaction was brokered by Chris O’Brien, Ben Hegerty, Rory Hilton and Andrew Bell of CBRE Capital Markets.
The global pharmaceutical giant announced last year it would close its Melbourne factory after 50 years of operation, a move that will axe 300 jobs. It was GSK’s largest pharmaceutical manufacturing plant in the southern hemisphere.
The Boronia site focuses on high-volume products and Blow-Fill-Seal manufacturing, a process in which a container is formed, filled, and sealed in a continuous method without human intervention, creating sterile products that don’t need to be refrigerated.
They are used in respiratory products like ampoules and products that are inhaled.
GSK has said it had less need for such highly skilled and specialised capabilities as it develops a more innovative pipeline.
