Malaysia's Sime Darby sale & leaseback of industrial property portfolio

Sime Darby is a Malaysia-based diversified multinational with operations in 25 countries. The group is involved in a range of sectors, including logistics, plantation, industrial equipment and property.

Their Australian operations include wholly-owned subsidiary Hastings Deering (Australia) Limited.

Hastings Deering is a distributor of CAT earthmoving equipment and power solutions for the mining, construction, forestry, agricultural sectors.

Hastings Deering operate from a portfolio of industrial and commercial property sites across Australia. It wished to unlock the capital value of its property portfolio for reinvestment elsewhere in the Hastings Deering business, while maintaining day-to-day operations and protecting the future use of its sites.

What was the role of the firm?

MinterEllison advised Hastings Deering on all aspects of the transaction, including the structuring and negotiations of a 30 year triple-net lease back structure in order to allow Hastings Deering to achieve their desired outcome.

MinterEllison also provided Hastings Deering with extensive foreign investment advice having regard to the duration of the leaseback arrangements and the involvement of Sime Darby, factors that added complexity to the transaction and required the MinterEllison team to work under tight timeframes and with a geographically and culturally diverse client team.

Throughout the course of the transaction, all members of the MinterEllison team worked closely with the Hastings Deering commercial and legal teams, that in turn created an enduring and collaborative commitment to see the transaction through to completion.

Significance

The transaction is a significant, unique and strategic divestment, with the deal attracting interest from property investors across Australia and around the world.

Settlement of this transaction in July 2017 marked one of the largest multi-property, sale and leaseback transactions seen in the Queensland industrial property sector in 2017.