Aware Super targets next generation logistics with Austrak Business Park buy

The super fund heavyweight is pouring about $1bn into a logistics estate and intermodal terminal on the outskirts of Melbourne as it bets on these sectors for superior returns.

Labelmakers is one of the existing tenants at the Austrak Business Park, which has been bought by Aware Super for $600m.

Investment fund heavyweight Aware Super is forging deeper into the logistics market as it seeks to ride the dual trends of e-commerce and population growth, with its property arm buying an industrial estate in Melbourne for $600m.

The move is the largest single asset purchase in the sector for about 15 years and puts the $150bn fund on track to further boost its property holdings by also developing out parts of the sprawling Austrak Business Park as the fund generates more returns from non-traditional areas of property such as logistics and living.

The fund is already a big investor in industrial parks and believes its long-term outlook gives it an advantage when buying properties that can be transformed in coming years.

It is capitalising as old-style warehouses are being superseded by more modern, technology-driven complexes where tenants are investing heavily in automated equipment, making them fortress style holdings.

In a sign of how big funds are able to use scale and their ability to invest across different sectors to boost returns, the deal will take Aware’s investment in the area to about $1bn. The Intermodal Terminal Company, which it owns, is also building a $400m intermodal terminal next to the logistics park in the suburb of Somerton.

Aware Real Estate has bought the Austrak Business Park in Somerton, Melbourne.

Superannuation funds are buying big holdings at a time when many listed groups are either selling assets or seeking to recapitalise. Industrial values have also slightly cooled from the intense boom during the pandemic, when deliveries surged, and there was very low interest rates. Big buyers now include ­giants like REST and UniSuper and ISPT, which have bought land to develop.

In the latest deal, the super fund’s Aware Real Estate unit, in partnership with global funds house Barings, will buy Austrak Business Park from the listed GPT and private developer Austrak AFM. The off-market transaction was brokered by Cushman & Wakefield’s Tony Iuliano and Adrian Rowse.

The 99ha industrial estate in Melbourne’s northern suburbs is a mix of existing buildings and development land. It is connected with major transport links including the Port Rail Shuttle Network and the Inland Rail Freight Corridor. Tenants include Coles, Bunnings and Labelmakers, while the total development site spans about 373,000sq m with a large frontage to the Hume Highway.

The deal is the latest one out of the partnership with Barings, which under the previous banner of Altis Property Partners played a major role in setting up the Aware Real Estate portfolio.

Aware Real Estate chief executive Michelle McNally said the investment was the latest in the $6bn platform’s strategy of acquiring well-located assets with strong tenants and the opportunity to add value through development.

Ms McNally said that once the adjacent intermodal was completed it would be the first in Melbourne where tenants could co-locate their operations on a logistics estate. “And that should bring some great benefits to the occupiers to be able to actually interact with that intermodal terminal,” she said.

 Aware has already created a master plan, which should deliver a stronger value proposition for tenants. Ms McNally said that while the facilities operated separately, there was strong synergies between them.

“Our strategy will deliver high-quality new developments with strong placemaking featuring amenities for the site such as cafes and ESG performance with energy-efficient buildings, solar panels and EV charging,” Ms McNally said.