Aldi to sell off $700m worth of warehouses

Aldi has grown to about 540 stores nationwide. Picture: Kevin Farmer
Aldi has grown to about 540 stores nationwide. Picture: Kevin Farmer

German supermarket giant Aldi giant has become the latest company to capitalise on the boom in logistics property deals and has tapped real estate firm JLL to offer a $700 million portfolio of warehouses.

Aldi has built up a network of top flight distribution centres around the country as it had made deep inroads as a supermarket operator, taking on local giants Coles and Woolworths.

The company is likely to take a long lease back on the centres and pour the sale proceeds back into its front line supermarket operations, as both Australian majors have looked to combat the German group.

Aldi has grown to about 540 stores nationwide and told The Australian last year it had a national market share of just under 10%.

The discount grocery and general merchandise chain is also delivering double-digit sales growth and its main categories are unlikely to have been significantly disrupted by bushfires or concerns about the coronavirus.

The Aldi warehouses, mainly along the east coast, will likely be keenly contested as property groups have been snapping up logistics assets as they offer steady returns even as retail property comes under pressure.

Other big players are also cashing in with private equity giant KKR offloading a near $650 million portfolio of Arnott’s facilities and Blackstone selling, also via JLL, an $800 million portfolio that it assembled with Fife Capital.

Investors are keen to buy both new warehouses, that sport modern technologies and are often driven by robotics, as they seek out properties that will rise in value in coming years.

International groups and wholesale property vehicles are also scouting out Australia for new industrial property products.

But local buyers including Charter Hall and Centuria have dominated over the last year and the GPT Group is also stepping up. Others including Stockland Mirvac are also expanding their holdings.

Some diversified listed property groups are also seeking to integrate their holdings by owning shopping centres, offices and warehouses for major tenants like retail chains.

Listed company Qube is also running a process for properties including Sydney’s Moorebank Logistics Park, a rail terminal at Minto and the Beveridge holding, north of Melbourne that is one of two probable locations for an intermodal facility.

Investment bank UBS is handling the process and has sought proposals from property groups and pension funds able to assist in debt or equity funding the massive precincts that could be worth about $2.5 billion.

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