Giants BGO and PGIM pour millions into Sydney logistics

The logistics sector is moving and it’s the international giants such as BGO which are pushing their way into the Sydney market with big investments.

Centuria Capital has bought 1 Quarry Road, Tottenham.

Big-name investors are piling into Sydney’s industrial property market, with Centuria Capital and US giant BGO joining forces to buy $200m worth of warehouses from Goodman Group.

The duo have picked up three western Sydney warehouses from the sector giant.

Separately, Charlie Buxton’s Cadence Capital has joined with PGIM Real Estate to buy an intermodal terminal in the city’s west at St Marys.

The deals mark the latest in a run of portfolio transactions that have swept the industrial market.

Some big investors are also getting deeper into the market, with the listed GPT and QuadReal Property Group last week unveiling a new $1bn Australian logistics fund.

Centuria’s Sydney warehouses comprise about 45,000sq m of prime industrial space in tightly-held urban infill markets where vacancy is 2.7 per cent.

BGO – Centuria’s global real estate manager partner – is part of Sun Life Financial and has $100bn of assets under management. It is supported locally by Cliffbrook Capital, and is on the hunt for more urban infill industrial assets.

The company swept into the market last year with the purchase of a $580m tower in Sydney’s Bond Street, and is in talks to take a slice of Grosvenor Place.

Centuria joint chief executive Jason Huljich said the company would “continue to seek opportunities across tightly-held industrial markets to grow the partnership”.

Centuria joint chief executive Jason Huljich.

“This type of institutional partnership speaks to the strong appetite from international capital seeking to harness the strong domestic industrial sector tailwinds, particularly within infill markets which benefit from proximity to households and businesses alike,” he said.

Centuria head of funds management Jesse Curtis called out Australia’s burgeoning population, which was increasing demand from the industrial and logistic sector, coupled with limited new supply within infill markets. “We believe macroeconomic tailwinds for the sector will persist throughout the medium term,” he said, noting the properties could also be repositioned in future.

Smithfield and Seven Hills are well established industrial infill markets with access to major road networks and residential catchments.

CBRE’s Chris O’Brien, Jason Edge and Shaun Timbrell and Colliers’ Trent Gallagher and Gavin Bishop handled the transaction.

In another play in the gateway city, Cadence and PGIM bought the St Marys Intermodal Terminal in western Sydney from Pacific National for $145m. The purchase gave the pair a top last-mile logistics and infrastructure asset in the area, with the move marking their first tie-up.

The property spans 157,669sq m of land with a gross lettable area of 95,940sq m, including a 1.5km rail spur and a planned 20,000sq m handstand expansion.

They struck a new 20-year lease with existing tenant ACFS Port Logistics, securing long-term income and providing a strong foundation for future value creation. “This was a unique infrastructure-aligned asset that presented an opportunity to work with the sitting tenant to expand the asset and create value for all parties,” Mr Buxton said.

Centuria and BGO have acquired a portfolio including 28 Britton Street, Smithfield.

The St Marys Intermodal Terminal has direct freight rail access to Port Botany and is billed as a more sustainable option than congested road freight routes.

The PGIM investment was made on behalf of PGIM Real Estate’s Asia Core strategy. and the firm’s head of Australia, Steve Bulloch, said there were only eight intermodals in Sydney.

He said the opportunity to acquire a unique asset, with strong real estate and infrastructure characteristics, was attractive, as was the long-term tenant.

Mr Bulloch said PGIM Real Estate had been very active this year across a range of real estate assets and was focused on areas where there was increasing institutional appetite.

“There are enormous opportunities to unlock the full potential of St Marys Freight Hub beginning with an immediate expansion of the facility as part of the new lease,” he said.

CBRE agents Mr Edge, Cameron Grier and John Micallef handled the sale.

Market sentiment has lifted in the industrial and logistics sector this year, with institutional and offshore investors boosting activity. Colliers said they had deployed more than four times the capital in the first quarter compared to the same period in 2024.

The sector recorded significant direct investment volumes of $1.6bn across 29 deals to the end of March, and there has been a surge since that time.

The investment arm of Wall Street bank Morgan Stanley last month forged into the hit area, striking a capital partnership with real estate group Frasers Property over a $600m portfolio.

“The I&L sector has kicked off 2025 with strong momentum, driven by substantial direct investments and capital partnership activity, led by active local managers alongside APAC and US groups,” Colliers managing director, industrial and logistics Australia, Gavin Bishop said.

“There remains a strong focus on core opportunities along the eastern seaboard, while emerging demand-side trends are becoming evident in Adelaide and Perth contributing to heightened interest in these markets.

“There remains a laser focus from all investors on Sydney and tailwinds are gathering pace for Brisbane which has had one of the strongest quarterly investment volumes on record.”

Originally published as Giants BGO and PGIM pour millions into Sydney logistics