Funds management giant ISPT has beefed up its industrial development pipeline after paying $60 million for a large site in Melbourne’s south-west, bought from logistics giant Toll.
Industry insiders said the deal for the 30-hectare site on Horsburgh Drive in Altona North represented about a 100 per cent increase on what the property would have sold for 18 months ago and could recalibrate industrial land values across Melbourne.
The elongated rectangular site, which is mostly undeveloped, runs from Kororoit Creek Road to a Toll trucking facility at 39-53 Horsburgh Drive owned by LOGOS Property, one of the country’s biggest privately-owned developers and owners of logistics facilities.
ISPT, backed by superannuation funds, has a $17.5 billion diversified property portfolio, but is relatively lightweight in industrial property.
According to its 2018 Annual Review, only 7 per cent of its portfolio is invested in industrial and property with the majority of its investments in office and retail property. Its logistics portfolio comprised 15 properties worth $878 million as of June 30 last year.
Logistics is currently one of the hottest asset classes globally due to the boom in demand for new distribution and fulfilment centres that can service the the needs of e-commerce.
ISPT was contacted for comment on the deal but had not replied by the time of publication. A spokeswoman for Toll declined to comment.
Fund managers working together
The Australian Financial Review can also reveal that ISPT is working with reclusive fund manager Aliro, which has $10 billion of property development projects and $16 billion of funds under management according to its website.
The two fund managers established the ISPT Aliro Industrial Estate Trust, an unlisted unit trust, last year.
Aliro was established in 2017 by David Southon, the founder of the Charter Hall Group, and JP Morgan investment banker Daniel Wise, the former global head of property at Orica.
Asked if Aliro was involved in the Altona North acquisition, Mr Wise said Aliro was a private investment company with private investors and did not comment publicly about its activities.
ISPT has more than half of its industrial assets in Melbourne. It is currently masterplanning three industrial developments in western Sydney, in Melbourne’s south-east and in northern Brisbane. A development in Woodville in Adelaide is currently under way.
According to a new report by Knight Frank, new industrial supply reached a 10-year high in 2018 after 612,000 square metres was added to Melbourne’s industrial market. This surge was driven by strong owner-occupier and pre-lease activity.