Aware Super makes $300m play for Austrak Business Park stake

Aware Real Estate chief executive Michelle McNally.

The real estate arm of Superannuation giant Aware Super is in the frame to acquire a half stake in the Austrak Business Park in Melbourne from the listed GPT Group, with a deal in train valuing the interest at about $300m.

The transaction would mark the largest industrial and logistics play this year and show the depth of demand for big-ticket industrial assets has been rekindled.

GPT said at its results this month that as part of its targeted asset recycling program, it had commenced a process to divest its 50 per cent share in the Somerton estate, valued at approximately $300m, partly as it focuses on its own logistics platform.

GPT picked up its half share in the park from long-time owner private developer and investment company Austrak in 2003. The pair jointly developed much of the site, which includes one of Australia’s first fully integrated intermodal rail terminals.

The superannuation fund also knows the park well as it last year unveiled plans for a $400m open-access freight terminal on part of the Somerton park. That facility is due in 2025.

The deal is at an early stage with terms to be finalised and parties declined to comment.

Austrak Business Park now comprises six modern warehouse and logistics facilities, leased to major national operators. The properties span about 193,700 sqm over the 63.4ha site and the major tenants include Linfox, Coles, Kraft, Qube and Boral.

It sits about 20km north of Melbourne and 10km north east of Melbourne Airport, near Hume Highway.

The superannuation fund is bulking up in logistics. In late 2022, Aware Super unveiled an investment platform targeting the acquisition, construction and operation of an independent network of intermodal terminals as a way of pursuing fresh sources of long-term returns for its infrastructure portfolio.

It now owns the Intermodal Terminal Company platform and its management expertise to capture opportunities in the emerging infrastructure sub-sector.

But the park is likely to be held by superannuation fund’s property unit. Aware Real Estate is growing rapidly under CEO Michelle McNally and expects to have $7bn of assets in the next three years in living, industrial, office and mixed-use sectors.

Big industrial deals are tipped to make a comeback this year. Last June, rival listed group Dexus sold the Axxess Corporate Park in Mt Waverley to funds house Gateway Capital for about $315m. The purchaser had plans to redevelop part of the site to capitalise on its potential as a last-mile distribution hub.

Large portfolios were also offered up by groups ranging from Asian warehouse powerhouse ESR, industrial specialist Logos and Singaporean group CapitaLand, as well as Stockland, which sought a partner to expand its industrial holdings.

The logistics sector has been hit by conflicting forces with capitalisation rates blowing out but rental increases coming through strongly.

The result on the Austrak asset will be closely watched as it will provide an indicator as to where the market is headed this year and also the kind of capital which is chasing assets.

The move by the superannuation fund on the GPT asset follows a play by UniSuper, which snapped up a development site in Melbourne’s Deer Park that can support a $1bn-plus estate. UniSuper, working via its mandate with GPT, bought the surplus land from Orica for $260m and will build prime warehouses and logistics facilities. GPT has separately bulked up its industrial operation under departing chief executive Bob Johnston.

The deal shows the appetite for big-ticket projects in the sector with listed real estate investment trusts focusing on industrial property at a time when other areas remain tough.