Portfolio reweighting prompts $110 million Salta sale

Press Release – 24 September 2008

Salta Properties is to sell a small number of Melbourne and Sydney industrial assets valued at circa $110 million. It is rare for Salta to offer such prime assets from its portfolio, however as has occurred on a small number of occasions in the past, Salta is preparing to reweight its portfolio and undertake a series of significant office, industrial and residential projects.

CB Richard Ellis Directors Graham Hemingway, Matt Haddon and Greg Cohen have been appointed as the exclusive sales agent for the four Salta properties, at Arndell Park in Sydney and Altona and Somerton in Melbourne.

Expressions of Interest will be invited for either the individual assets or for the portfolio in one line.

Mr Hemingway said the strength of the lease covenants to Linfox, and to Coles at Salta's Altona asset, was expected to underpin strong buyer interest in the portfolio.

"There is re-emerging demand from both local and foreign buyers for well located, quality industrial assets with strong lease covenants," Mr Hemingway said.

"The Salta assets are all highly functional, modern logistics facilities, which are in prime locations adjacent to major road infrastructure networks."

The portfolio has a total net lettable area of circa 100,000 square metres. The largest asset is 676 Kororoit Creek Road in Altona, which has a net lettable area of 44,100 square metres. Also up for sale is 28-38 Transport Drive, Somerton (21,300 square metre); 484-490 Great Western Highway, Arndell Park (12,500 square metres) and 494-500 Great Western Highway, Arndell Park (25,200 square metres).

All four Salta industrial properties up for sale were purpose built for Westgate Logistics and, as such, are built to a high standard. With the Tarascio family having last year sold Westgate to Linfox reportedly for a number around $180 million, the decision has been taken to offer the facilities for sale to capitalise on renewed demand for prime industrial assets.

Salta managing director, Sam Tarascio said:

"These properties formed part of a high quality industrial portfolio occupied by Westgate Logistics, which the family sold to Linfox last year. Given the family no longer owns Westgate Logistics, these industrial properties no longer form a core part of our investment portfolio."

The sale will fund a further diversification for Salta, which has significantly expanded its portfolio in recent years. From an initial focus on the industrial sector, the private construction, investment and development group has diversified to undertake a wide range of projects including retail and luxury apartment developments such as No. 150 Clarendon – a redevelopment of the Mercy Maternity Hospital in East Melbourne which has achieved unprecedented sales success for the Tarascio family.

Salta Managing Director Sam Tarascio said the upcoming portfolio sale was part of a strategy to further reweight the group's portfolio. While industrial projects will remain one of the group's key focuses, Salta intends to undertake a series of major office developments, which the group intends to hold for the long term.

"As has always been the case at Salta, we are proactively managing our investment portfolio by redirecting proceeds from assets we identify as non core into other projects being developed by Salta which fit our current long term investment objectives," Mr Tarascio said.

"The Melbourne CBD vacancy rate reached a record low of 3% in July and the market is expected to tighten even further moving into 2009. With strong employment growth in Melbourne and limited new development on the drawing board we see considerable opportunities in the office sector in the next few years."

Profits generated from the portfolio sale will be redirected into holding a number of new planned office projects similar to those Salta is already developing.

Projects in development include a 10,000 square metre office fully leased to British Aerospace in Richmond, and a 7,000 square metre office building fully leased to IMA in Mulgrave. Details of other office developments that the proceeds may be used for are expected to be issued shortly.

Funds will also be directed towards future industrial developments, such as the proposed inland ports at Lyndhurst and Altona.

For further information:
Kathryn House
Communications Manager
Ph: (02) 9333 3585
Mob: 0402 465 440

Graham Hemingway
Senior Director
Ph: (03) 8621 3432
Mob: 0407 661 771

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