Super funds strike a $4bn logistics precinct deal at the site of Sydney’s new airport

A mega-sale to UniSuper and superannuation fund-backed manger ISPT sweeps away the last vestige of a China-backed plan for a city on the doorstep of the new Western Sydney airport.

An aerial view of construction work at Bradfield in Western Sydney, which will form the “Aerotropolis” surrounding Western Sydney Airport.

The bulk of a controversial parcel of land once owned by the Medich family near the under-construction Western Sydney Airport and that was once targeted by a Chinese-linked company has been sold off to a consortium of Australian superannuation funds for a knockout price of about $850m.

The surprise sale by Robert Jones Funds Management, a low-profile outfit that picked up a 344ha block of land from the Medichs in 2021 and then carved off chunks to international logistics company DHL and CDC Data Centres, will shape the future of Sydney’s second airport.

The remaining parcel has been bought by heavyweight superannuation fund UniSuper and superannuation fund-backed manager ISPT, as they aim to capitalise on the new airport and the broader logistics boom in western Sydney. The deal was negotiated for the purchasers by real estate investment management firm Richmond Bridge.

The land surrounding the planned Western Sydney Airport has seen a bevy of proposals from large developers, but little action on the ground despite its lucrative potential. It could be years before many of the planned sites get under way.

But ISPT and UniSuper are hoping to steal a march on their ­rivals and get the site, now known as Burra Park, under way with close to $4bn worth of development being planned in the ­medium term – and potentially as much again in the next decade.

They are well-positioned as the property sits adjacent to the entrance to the airport, where 24/7 operations will begin in 2026, taking on the existing curfew-bound Sydney Airport.

The site has been controversial as the original sale to Robert Jones for $499.95m prompted questions about the backers behind the fund.

However, Jonathan Pan and Bob Gong, who were both strategic advisers to China-backed BHL Group before they set up Robert Jones, are Australian ­citizens.

Mr Pan told The Australian there was now no connection between Robert Jones and BHL. But BHL was reported at one stage to have been appointed as development agents for the project.

BHL, whose major shareholder is Shen Yuxing, the founder and chairman of Hong Kong-listed property developer Jiayuan International Group, earlier sought to buy the site itself, but the deal did not go ahead. Jiayuan has since been caught up in the debt woes sweeping China’s development industry.

In 2017, Sydney’s property-­developing Medich family was reported to be in talks to sell the site at Badgerys Creek near the planned Western Sydney Airport to the Chinese-backed group.

A year later it proposed a new international university and education precinct, a wellness and healthcare centre headed by neurosurgeon Charlie Teo, a Westfield shopping centre and a hi-tech logistics hub, as key elements of the city it had planned on the site. But that deal and precinct did not go ahead.

The buyers refused to discuss the price of the latest off-market transaction. Robert Jones sold off 24ha of the site, where it will build four warehouses worth $180m, to DHL for $140m. It also sold off a 17ha parcel to CDC Data Centres for $150m.

UniSuper and ISPT said they acquired the 280ha greenfield logistics development site in a 50-50 joint venture. As the largest parcel of Enterprise Zoned land within the overall Western Sydney Aerotropolis, the site is primed to benefit from the region’s expected demographic and economic explosion, with top companies seeing it as a logistics and industrial hub of the future.

The pair will progressively develop Burra Park, with the first stages delivering a super prime manufacturing, warehouse and logistics estate of more than 400,000 sqm of gross floor area over the next seven years, and an expected value on completion of more than $3.9bn.

Even this could be an underestimate as, in the long run, the estate could deliver more than 800,000 sqm of space, with occupier demand supported by population growth, e-commerce and the growth in the airport precinct.

The site could accommodate a range of companies that want to be involved either with the airport precinct or the overall region’s growth.

UniSuper senior manager, property, Nick Stephens hailed the size of the deal.

“This is a super prime institutional-grade industrial property asset in Sydney’s tightly held western industrial precinct, adding to UniSuper’s $8bn unlisted property portfolio. It is distinguished not only by its scale but by its strategic positioning within the Northern Gateway precinct of the Western Sydney Aerotropolis,” he said.

ISPT chief investment and development officer Will Walker also noted its size even compared to other projects.

“Burra Park represents the single largest landholding within the NSW government’s ambitious Western Sydney Aerotropolis precinct and, given its strategically significant location, will be sought-after by organisations looking to invest and operate in this region that is set for major economic growth,” he said.

Richmond Bridge’s Pete Wylie praised the collective effort behind the transaction between UniSuper, ISPT and HB&B Property and said the land was “the best industrial development site in Australia”.