Fairfax Media has sold off its former newspaper printing plants in Sydney and Melbourne to property fund manager Charter Hall Group in a deal reportedly worth about $55 million.
Both plants had been decommissioned and flagged for sale for some time.
The decision to sell was driven by the company’s deep cost cutting and an ongoing strategy to pull back from print as the main distribution platform for the company’s papers, according to a report in The Australian newspaper.
“Fairfax had originally hoped to reap almost $70m from the combined sales of the Tullamarine site in Melbourne’s northwest and the larger Chullora facility in Sydney but they are now both in due diligence at the lower sum,” said the paper’s commercial property editor, Ben Wilmot. “Fairfax paid $220m for the Tullamarine facility, which opened only nine years ago. It spent another $70m to upgrade the Chullora plant in 2001, which was built for $315m in 1996.”
Chullora includes an existing industrial complex of 37,600 sq metres on a land parcel of more than 10 hectares. The Chullora plant was decommissioned late last year and the printing operation shifted to a smaller site at North Richmond, NSW.
Tullamarine was opened in 2003 to print the metropolitan daily newspaper The Age and other Fairfax papers. Since shutting down production at Tullamarine, Fairfax has moved some of its printing presses to a smaller site in Ballarat.
“While Charter Hall has been keen to secure sites in land constrained core logistics precincts, the pricing reflects the vacant nature of the sites and the need to reposition them,” said the report. Charter Hall’s purchase of the two sites will add to its $2.5 billion portfolio of mainly industrial properties around Australia.
Fairfax has declined to comment on the report.