Qualitas Buys into $500m Industrial Site

Private financier and investment firm Qualitas will invest $50 million in a new 60ha logistics hub in Melbourne’s northern suburbs.

The non-bank lender has bought into the $500m mixed-use development, at the 120,000sq m former Ford assembly site in Broadmeadows, which is being overseen by local developer Pelligra Group.

The precinct, to be known as Assembly Broadmeadows, will offer 305,000sq m of manufacturing, automation, logistics and warehousing space to accommodate manufacturing and innovative technology businesses.

The 12-month construction program has begun. Stage one is a 120,000sq m convenience retail precinct—further site development opportunities to come include a 100-room hotel, supermarket, gym and on-site childcare centre.

Pelligra, led by chairman Ross Pelligra, acquired the site in 2019 for $82.1 million.

The deal will mean the Broadmeadows project will be developed in a 50-50 joint venture between the two parties. It will run for five years and the fund is targeting a gross return over 20 per cent.

Qualitas co-founder Mark Fischer said the deal had been underpinned by the strength of the industrial sector in the current environment.

“Our approach is not to take a generic bet on a sector or market to deliver value and returns for our investors,” Fischer said.

“We are much more focused on finding opportunities where, along with our partners, we have a competitive edge that is supported by great fundamentals.”

The equity investment is part of the Qualitas Real Estate Opportunity Fund 2, a seven-year fund with $150m committed to date and which has interests in, or is looking at, build-to-sell residential and office developments.

The deal with Pelligra is the fifth investment for the fund, securing just shy of $300m of investments, with Qualitas in the process of completing further capital raising for the vehicle during coming months.

The joint venture partners have enlisted Citinova to undertake the development management and delivery of the project across strategy, design, structure, leasing and partnerships.

“We are at a pivotal moment in time as fragile international supply chains are being disrupted in favour of domestic manufacturing capability and self-sufficiency,” Pelligra said.

“As a result, localised manufacturing is having a revival of sorts— buoyed by the logistics and e-commerce boom and a real push towards embracing new technologies and automation.”

Citinova has been tasked with targeting manufacturers in sectors such as hydrogen, electric cars, robotics and renewable energy.

The precinct has been designed to set new standards for sustainability with a 14-megawatt renewable energy system currently being installed within the first stage, which will provide energy savings of up to 20 per cent across the site.

In Ravenhall, west of the city, Pelligra has plans for a $100m industrial project across a 20.8ha site it purchased midway through 2020.