Charter Hall pays Rich Lister Robert Magid $84m for logistics site
Rich Lister Robert Magid has cashed in on the boom in the logistics sector and in particular a shortage of zoned industrial land close to the major cities by selling a 5.5ha site in Melbourne’s south-eastern suburbs for $84 million to Charter Hall.
That’s almost 34 times more than Mr Magid’s late father, Fountain Gate Shopping Centre developer Isador Magid, paid for the Mulgrave site, when he bought it for $2.5 million from receivers in late 1993.
The sale price equated to a yield of just 3.09 per cent, a reflection of the appetite among institutional investors for well-located industrial assets.
The site on the corner of Springvale and Wellington Roads – marketed as Monash Pinnacle by CBRE – has the potential to be redeveloped into up to 100,000 square metres of last-mile logistics facilities being just 30 kilometres from the Melbourne CBD and close to EastLink, Monash Freeway and the Princes Highway.
It is currently home to almost 28,000 square metres of office and industrial buildings leased to the likes of bicycle distributor Sheppard Cycles and US technology company Keysite.
The weighted average lease expiry across the site is less than three years, providing an opportunity for Charter Hall to redevelop or reposition the property in the short to medium term, and benefit from significant rental uplift.
Made up of three adjoining lots, the site lies within the Monash National Innovation & Employment Cluster, an emerging technology precinct centred around Monash University.
Highlighting the demand for land in the precinct, in August, the university paid $66 million for a 3.6-hectare site at 611-625 Blackburn Road opposite its Clayton campus, acquiring it from Toyota Australia and fighting off competition from almost a dozen other buyers, most of them institutional investors.
Large industrial-zoned sites close to major city centres are in both short supply and high demand due to the growth of e-commerce and the need for suppliers to have logistics facilities close to end customers.
Charter Hall, which has made industrial development a big part of its expansion strategy, declined to comment on its acquisition of the Mulgrave site. The ASX-listed fund manager’s portfolio hit almost $80 billion last financial year.
The sale of the industrial site is the latest major property disposal by Mr Magid, who in addition to being a property developer and investor is also the publisher of The Australian Jewish News.
Worth $710 million according to the 2022 Financial Review Rich List, Mr Magid has been trading out of a number of key real estate holdings this year.
In February, he put two of his trophy hotels, Sydney’s Harbour Rocks Hotel and Hotel Lindrum in the Melbourne CBD – both operated by Accor under its boutique MGallery brand – up for sale with expectations of about $100 million.
The 59-room Hotel Lindrum, which was offered with a permit for a 30-level mixed-use project comprising 77 hotel rooms and 68 residential apartments, sold in March for $50 million to Melbourne developer Time & Place.
Charter Hall’s big move in Mulgrave follows Rich Lister Sam Tarascio’s Salta Properties settling the $160 million purchase of a 123-hectare site in Cranbourne West, also in Melbourne’s south-east, though a lot further out.
Salta acquired the site at 690 Western Port Highway from developers Leighton and Dacland, cementing its status as the dominant landowner in the outer south-east with 300 hectares under its control when combined with the 180-hectare Nexus Dandenong South Industrial Estate. Salta expects to develop more than $3 billion of logistics estates across these holdings.
Alongside these acquisitions, land banker Paul Sass is hoping to cash in on demand for industrial land in the south-east after listing a 53.6-hectare site in Clyde for $120 million. This is double the $60 million he paid for it in 2019, in a deal which only settled in May.
Offering 41.2 hectares of developable area, the 585 Berwick-Cranbourne Road is being marketed by LAWD agents Paul Callanan, Peter Sagar and Darcy Tobin.