CSR makes $48 million profit on industrial land sale
Building products maker CSR will take home almost $50 million in pre-tax earnings after selling a third site at its soon-to-close brick quarry in Horsley Park in Sydney’s west for almost $10 million a hectare.
The company said it had sold the 8.6 hectare PGH Brick operating plant site for $84.3 million to a “Northern American entity”, having previously sold sites to Frasers and ESR.
A shortage of zoned industrial land in western Sydney combined with surging appetite for logistics investments from both local and offshore funds has driven a spike in values.
However, the rezoning in July of 850 hectares of land for industrial use near the future Western Sydney Airport (known as the Mamre Road Precinct) is expected to ease some of the land supply pressures and could dampen land prices.
“The results we have been able to achieve at Horsley Park highlights the value uplift we can deliver by directly managing these large-scale rehabilitation and rezoning processes,” said David Fallu, CSR chief financial officer and executive general manager of property.
CSR said property earnings before interest and tax (EBIT) of about $48 million were anticipated from the sale of the site to the North Americans.
Cameron Grier and Jason Edge from CBRE brokered the deal.
To date, CSR has sold 39 hectares of land at Horsley Park for a combined$285 million.
A 10-hectare site on Burley Road sold to Frasers Property Group for $58 million in April 2018.
Then, in November last year, ESR swooped on a 20-hectare parcel, paying $142.5 million, with plans to develop as much as 110,000sq m of industrial space across as many as six warehouses.
CSR said it expected to generate earnings of $94 million from this sale.
While the buyer of the latest parcel has not been disclosed, industry sources said private equity giant KKR and Canada’s Oxford Properties were among those in the market for acquisitions.
The sale of land at Horsley Park comes as CSR optimises the operational footprint of its PGH Brick network which includes five operating plants in NSW with over 440 hectares of land in western Sydney.
PGH will close its current operating plant at Horsley Park in March 2021.
“Horsley Park is located in a very attractive area within the western Sydney industrial market, strategically positioned to major transport and infrastructure links,” said CSR managing director and CEO Julie Coates.
