ESR has struck a A$420m (€253m) deal with the Australian logistics company Toll Group to build a retail distribution centre at Westlink Industry Park in Western Sydney.

With the commitment from Japan Post-owned Toll, an existing partner, ESR Australia will kick off the development of an A$1.2bn logistics hub in an area known as Kemps Creek. The asset is held in ESR Australia Logistics Partnership, backed by Singapore’s GIC.

ESR will spend A$200m building the facility and Toll will invest a further A$200m in fitting out the warehouse which is expected to be completed in September 2024.

ESR Australia’s CEO, Phil Pearce, said the partnership with Toll represents a significant milestone, further advancing Westlink’s ambition of connecting businesses to the Australian market.

Pearce said: “Toll and ESR Australia are aligned in their commitment to providing customers with seamless logistics offerings to support their future needs as a business. This will be achieved at Westlink through automated systems and high-quality infrastructure.”

Pearce told IPE Real Assets that Toll would lease the Kemps Creek warehouse and office space and a 300-space multi-deck park on the 10.8-hectare site from ESR for an initial 10 years with further two five-year options.

Nick Vrckovski, Toll president of retail and consumer, said: “The new facility will be Toll’s largest in Australia, and will feature the latest technology and automation so that retailers can deliver the best e-commerce experience for shoppers.”

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