Brickworks (ASX: BKW) and Goodman (ASX: GMG) have just announced that Amazon has signed on to be another major tenant.
What is the partnership between Brickworks and Goodman?
The two property-related businesses own a joint venture industry property trust. Brickworks sells surplus land assets into this JV to be developed into industrial properties. The facilities helps its customers meet the supply chain needs of the growing digital economy.
Amazon signs on
Amazon is one of the biggest ecommerce businesses in the world and it has just signed on with the JV industry property trust.
The lease is a pre-commitment for 20 years with Amazon at the Oakdale West Estate in Western Sydney, conditional on regulatory approvals.
The state of the art distribution facility will be a landmark development for the JV trust. It will be on 14.9 hectares of land and a base floor area of 53,500 square metres. The high-bay facility will be 26 metres high with three mezzinine levels with a total of 191,170 square metres of usable floor space.
The JV trust aims to complete the building in the second half of FY21. Infrastructure works to the estate will commence following development approval being secured.
Amazon is the second customer to pre-commit to Oakdale West, following the Coles (ASX: COL) announcement a year and a half ago.
After these two facilities are completed, the gross assets across the JV Trust is expected to be worth more than $3 billion. The JV Trust has sufficient remaining land to provide in excess of a five year development pipeline.
Brickworks Managing Director Lindsay Partridge said: “We are at the forefront of the ecommerce revolution, with our facilities playing a pivotal role in helping our customers meet the supply chain needs of this new economy.
“We are also excited by the design of this facility, which responds to the increasing need for technology innovation from our customers. This project will deliver profit during the development phase and further rental income for the Property Trust once complete.”
Summary
This is another good step by Brickworks and Goodman. Amazon is probably one of the best tenants in the world to have.
I think Brickworks is a buy just based on the strength of its JV property trust and the holding of WHSP (ASX: SOL
) shares. Construction remains a compelling long term idea too, once this COVID-19 period is over.
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Disclosure: At the time of writing, Jaz owns shares of WHSP, but this could change at any time.
