P&O Ports Leases Inter-Modal Rail Terminal

MELBOURNE-The London-based container terminal operator and stevedore P&O Ports has leased the new inter-modal rail terminal at the Austrak Business Park/Somerton here for 10 years with two additional 10-year options. The 250-acre park is jointly owned by Sydney-based General Property Trust and Austrak, a Queensland-based privately owned property development and investment company.P&O Ports operates 27 container terminals and handles logistics operations in over 100 ports in 18 countries. GPT portfolio manager Victor Georos says the inter-modal terminal represents an important point of difference to the Park, providing tenants with access to an alternative, cost-effective distribution system and the opportunity for supply chain savings. The provision of an experienced terminal operator enhances the attractiveness of the business park to users and provides improved returns to GPT, he says.GPT acquired a 50% interest in the park in 2003 for $57.3 million, including $25.3 million for existing improvements and $32 million for the land and terminal infrastructure. At that time, with about 55 acres of the park developed, GPT said the return on existing improvements would provide GPT with an initial yield of 9.2% (after acquisition costs). Upon development of the remaining 195 acres (including the terminal area), GPT said the entire park would have a value in excess of $300 million. The company has upped its expectations since that time. In announcing the P&O lease, Georos says that as the rest of the park is developed over time, “GPT’s [50%] investment has the potential to increase to approximately $200 million.”The park can hold another three million sf of buildings that are expected to be built out over the next five to seven years, according to GPT. Existing tenants include Effem Foods, Visy and IPS Logistics. In addition, construction is under way for a 180,000-sf facility for Labelmakers that is due for completion this September.