Mr Viral
St Mary’s Intermodal Terminal in western Sydney (Image: Pacific National)
PGIM Real Estate has partnered with Australia’s Cadence Property Group to acquire a logistics and infrastructure asset in western Sydney from rail freight operator Pacific National for A$145 million ($93.5 million), as the division of insurance giant Prudential Financial ups its bets on the logistics sector Down Under.
St Mary’s Intermodal Terminal comprises 157,669 square metres of land with a gross lettable area of 95,940 square metres (1 million square feet) and a 1.5 kilometre (0.8 mile) rail spur providing access to Port Botany on Sydney’s Botany Bay, PGIM said Monday in a release. The partners have secured a 20-year lease with existing tenant ACFS Port Logistics, and a 20,000 square metre expansion of the paved hardstand is also planned.
The investment in the freight hub is being made on behalf of PGIM’s Asia Core strategy and comes on top of the US fund manager’s February purchase of a 50 percent stake in a Queensland industrial estate from Aussie builder Stockland for A$207.5 million ($135.2 million) under a joint venture with KM Property Funds.
“The opportunity to acquire a unique asset like this, with strong real estate and infrastructure characteristics, was attractive to us and the ability to substantially de-risk it by having a long-term tenant in place prior to acquisition added to the appeal,” said Steve Bulloch, head of Australia at PGIM Real Estate.
Unclogging Highway Routes
The St Mary’s freight hub at 2 Forrester Road spans 10 hectares of the 43 hectare (106 acre) Pacific National site and began operating in December 2021. Located 47 kilometres west of central Sydney, the facility offers an alternative to congested highway routes with the potential to eliminate up to 3,000 truck movements a day, according to Pacific National, which operates 570 locomotives and 700 weekly train services hauling freight across Australia.
Steve Bulloch, head of Australia at PGIM Real Estate
“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,” said Cadence founder and CEO Charlie Buxton, who has transacted over A$2 billion in real estate across Melbourne, Brisbane and Sydney since the group’s establishment in 2014.
CBRE’s capital markets team advised Pacific National on the sale of the freight hub, which the consultancy characterised as a rare opportunity for the buyers.
“A site of this nature almost never is offered to market in Sydney, something that the purchaser recognised early on in the campaign,” said Jason Edge, national director of capital markets for industrial/logistics at CBRE.
The latest transaction in the Harbour City’s red-hot logistics space comes after Cushman & Wakefield tracked more than A$1 billion in industrial deals in the local market during the first quarter of the year, up from just A$152.5 million at the same point in 2024. The three-month total was underpinned by Gateway Capital’s acquisition of the Connect Central Estate from Brookfield, in a deal Cushman pegged at close to A$315 million, and KKR and M&G’s separate partnerships with Stockland to invest in a shed portfolio valued at over A$800 million.
$2B Action Plan
PGIM Real Estate, a manager of $206 billion in assets globally, last month revealed plans to invest $2 billion in Asia Pacific property this year after deploying $900 million in the region in the first quarter, mainly in Japan.
Mingtiandi reported in February that PGIM and a local unit of US private equity firm Proprium Capital Partners had agreed to buy 20 Bridge Street, the longtime home of the Australian Securities Exchange, from Hong Kong toy tycoon Francis Choi for A$270 million. The 14-storey block in the Sydney CBD measures 20,150 square metres by net lettable area.
“PGIM Real Estate has been very active this year across a range of real estate asset classes, but we have also been very selective in pursuing strategies with a strong underlying thematic and assets that will be well positioned for the heightened market volatility in the near term,” Bulloch said.
The last 10 months saw PGIM target a A$750 million hard cap for its first Australian real estate debt fund and announce a $2 billion final closing of the firm’s first global data centre fund.
PGIM made its first APAC data centre investment in 2021 after forming a $575 million joint venture with US heavyweight Equinix to develop and operate facilities in Sydney.
