Urban Logistics to spread wings with new chief Narelle Checchin targeting $2bn

Urban Logistics Co chief executive Narelle Checchin.

UrbanLogistics Co., which is backed by private equity real estate firm NashCap and US giant BlackRock Real Assets, has tapped Narelle Checchin to become chief executive as it aims to double its holdings to $2bn

The business, which specialises in buying infill industrial sites and boosting their uses, will be run by former Mirvac executive Ms Checchin from July.

The Sydney-based company has capitalised on the surge in e-commerce and reorganisation of supply chains in the wake of the pandemic and the incoming chief sees more opportunities in the last mile sector.

“There is a significant opportunity in the Australian market for businesses to improve on customer expectations for delivery and service,” Ms Checchin said.

The incoming chief has had more than two decades in property, spanning office, industrial, retail, and residential assets, and recently led Mirvac’s retail development business and oversaw investor relations.

She had also worked with Australand Property Group, now Frasers Property, in its industrial business across design, development, and investor relations.

Urban Logistics Co. was set up just three years ago, focused on urban infill industrial warehouses at a time when last mile logistics had surged in major capitals.

NashCap director Fabian Nager said that the new CEO would be “responsible for the portfolio’s continued repositioning and development strategy as we continue to benefit from the significant growth and demand in last mile logistics assets in Australia’s gateway cities”.

Mr Nager noted her experience in retail, which was especially relevant in last mile deliveries.

“It’s more retail in the sense that the product leaving those warehouses goes to end customers,” he said. Demand was being mostly driven by businesses taking on more inventory, with the trend continuing from the initial restructure of supply chains during Covid as they sought to deliver to customers on time.

The portfolio now comprised 27 separate warehouse buildings, occupied by 45 tenants. It was equally weighted to Sydney and Melbourne, Australia’s top industrial markets with the warehouses sitting near dense population centres, the CBD and key infrastructure.

The company had moved fast deploying its targeted capital eight months ahead of the initial strategy plan, beating the hot market by acquiring off-market, mainly through private sale and via the company’s proprietary relationship network.

The company aimed to top the $2bn mark over the next five years through targeted acquisitions and by developing its existing landbank.

NashCap executive director Alastair Nash said the firm was progressing the BlackRock mandate, which had been enlarged and extended, allowing it to expand, primarily by more intensively using its existing sites.

The company wanted to capitalise, in time, on very low vacancy in the sector. “I think the reality is once you factor in frictional and structural vacancy it is probably close to zero,” he said.

“By the time you’re retrofitting space for tenants to leave and move into space in some places, there’s really no available leasable space,” he said.

The tight conditions meant higher rents. Nash said that the company’s spreads on its lease renewals averaged about 30 per cent and NashCap was yet to put a new tenant into the portfolio.

“We’re getting inquiries on a daily basis from new tenants but we’ve been unable to do so,” he said.

Urban Logistics is banking on a busy next phase of repositioning assets and redeveloping landbank opportunities to change that.