Happy little Vegemites as factory stays in local hands

The home of Vegemite will stay in Australia after the world-famous spread’s owner, ASX-listed Bega Cheese, inked a sale and leaseback deal for the 100-year-old Melbourne factory with Charter Hall.

The property giant has secured the 1 Vegemite Way, Port Melbourne site for $114.6 million, with the funds to be funnelled back to Bega’s balance sheet.

1 Vegemite Way, Port Melbourne.Credit: Jason South

Under the terms of the agreement, which guarantees that the brand’s production remains in Australian hands, Bega has signed off on a 15-year lease with a further 10-year option to extend.

Vegemite has been manufactured at the Melbourne factory since 1923, but the brand came to Bega in 2017 as part of its deal to buy the spread and other local grocery products from Mondelez International, which was previously called Kraft Foods.

Bega put the plant on the market in May 2022. US property group Hines was touted as a potential buyer of the factory late last year, raising concerns that the facility was headed for closure.

The food manufacturer has an extensive property portfolio that includes 20 dairy and food processing sites of its own across Australia, milk plants, cheese factories, dairy powder plants, juice plants, two peanut processing sites and its big spreads and sauces plant at Port Melbourne.

Bega chief executive Peter Findlay said the company will continue to review other opportunities across the portfolio. The sale was advised by Colliers and Addisons.

The Vegemite factory sale comes amid a flurry of commercial deals before the financial year, with Coles Group Property Developments selling a high-profile mixed-use apartment and retail site in Sydney’s Sutherland Shire to property developer Conquest for $44 million.

The Caringbah site covers 6,453 square metres and also comes with an agreement to leaseback a full-line 4,073 square metre Coles supermarket and Liquorland and six specialty shops. There is a separate development approval in place for 120 one, two and three-bedroom apartments. The complex was sold by CBRE’s James Douglas and Ben Wicks.

Conquest chief executive Michael Akkawi said the project will “revitalise the Caringbah precinct”.

“The new precinct will provide much needed amenities, specialty shops, and quality residences,” Akkawi said.

Douglas, CBRE senior national director, retail capital markets, said the sale campaign generated 125 investor inquiries, with 20 formal bids submitted.

He said these bids came from retail and residential developers, who were attracted by having a pre-commitment from Coles as well as the planning approval for the apartment component of the project.

Meanwhile, a range of buyers is running the ruler over Stockland’s $2 billion industrial portfolio, which is being handled by CBRE.

Coles Group Property Developments has sold a high-profile mixed-use apartment and retail site in Caringbah in Sydney’s south for $44 million 

The diversified property giant is seeking a capital partner for the assets with AustralianSuper and Rest Super said to be some interested parties.

Stockland chief executive Tarun Gupta has said he wants to engage more capital partners across the company’s divisions to alleviate risk and add more funds to the development costs.

One such project is at the $2 billion M_Park mixed use and tech hub at Macquarie Park in Sydney which is being developed by Stockland and backed by Canadian group Ivanhoe Cambridge.

Stockland has appointed ADCO Constructions for the next and final stage of M_Park Stage 1, which includes two workplace buildings, retail amenity and a 2,500 square metre open park, which was designed by landscape architect Square One.

Under the plan ADCO will carry out the construction for 17 Khartoum Road, a six-storey workplace building with three basement levels, as well as 15 Khartoum Road, a seven-storey workplace building with three basement levels.

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