To sign up for Analytiqa's free weekly newsletter, please enter your details below.
Analytiqa will not share this information with third parties.
Extending existing temperature controlled and ambient warehouses
Woolworths is investing in the expansion of its South Australian head office and primary Distribution Centre servicing South Australia and the Northern Territory at 599 Main North Road, Gepps Cross, SA, for approximately A$57.0 million. Growthpoint Properties Australia has entered into contracts with Woolworths to fund the expansion
The expansion, which is expected to achieve practical completion by mid-CY20, will include an extension of the existing temperature controlled and ambient warehouses, construction of a new recycling facility and other ancillary improvements.
Growthpoint is funding the development and will receive a coupon for the project costs as they are incurred at a yield of 6.75%. On completion, the total project cost will be rentalised via a new 15-year lease over the property, which will comprise around 90,000 m2 of lettable area.
As part of the overall transaction, Growthpoint has also agreed with Woolworths to an early surrender of its lease at 120 Northcorp Boulevard, Broadmeadows, Victoria. It is expected the early surrender period will amount to approximately 1.5 years, however the exact timing of Woolworths departure is yet to be confirmed.
As part of its overall supply chain strategy, Woolworths considered a range of options to support its growth. They elected to expand at 599 Main North Road, Gepps Cross due to the its significant locational benefits from a logistics and supply chain management perspective.
The early surrender of the lease at Broadmeadows provides Growthpoint the opportunity to explore development options for the 25 hectares of industrial site. Site coverage is currently less than 25.0% and tenant demand for high quality logistics space in Melbourne’s north is strong. It will also canvass the market for large occupiers who can lease the existing facility, with significant land for future expansion.