Qantas sells Sydney Airport site to LOGOS and AustralianSuper for $802m
Qantas has entered into binding agreements with a consortium led by property funds manager Logos for the sale of 13.8ha of land in Mascot for $802m.
Settlement of the vast majority of the lots bordering Sydney Airport is expected in December, with Qantas planning to use the funds to reduce debt and accelerate the airline’s recovery.
The consortium backed by Abu Dhabi Investment Authority and superannuation giant AustralianSuper plans to redevelop the site into a state of the art, four-level ramp up, logistics, e-commerce and last mile logistics hub.
Upon development completion, the property fronting Coward St, Kent Rd and King St is forecast to have an end value in excess of $2 billion.
The sale of the largely underdeveloped land is one of the largest commercial deals struck in recently in Sydney, and followed a three month expressions of interest process, which resulted in 18 bids from a range of Australian and international syndicates.
The property was one of the last available scalable logistics and commercial development sites in the coveted south Sydney market.
As part of the transaction, Qantas will lease back portions of the land for a period of time while arrangements are made to relocate some of the functions that the land is currently used for and while Logos finalises its development plans.
The national carrier has also entered into discussions with Logos about potential future development options for the sites they are acquiring, including creation of a dedicated precinct for the airline, as well as the sale of an additional 3ha of adjoining land.
Qantas expects to complete the evaluation of these proposals in early 2022, and if an agreement is reached, has the potential to raise the total value of the deal to more than $1 billion.
Qantas Group CEO Alan Joyce said Logos had put forward a number of proposals on how the airline could unlock further value from its landholding in Mascot.
“It could see a new headquarters combined with a relocated training centre and distribution hub, right next to the airport, rather than being spread across different parts of Mascot as they are now,” he said.
Logos head of Australia & New Zealand Darren Searle said the site was a rare opportunity to develop a commercial hub between Sydney ports and the airport.
“The site is a key freight gateway for the airport and offers unparalleled connectivity as a critical link to supply chains around the country,” he said.
AustralianSuper’s involvement in the deal comes as the country’s largest superannuation fund is in another consortium launching a $32 billion takeover bid of Sydney Airport.
Its head of property Bevan Towning said this was an opportunity for the fund to partner with Logos on site that offered significant long-term property development opportunities.
“Growing AustralianSuper’s investment in major logistics assets that are focused on the growing demand for e-commerce and distribution hubs close to key infrastructure and population centres will match member needs for strong, sustainable long-term returns,” he said.