The sale to Goodman Australia, which was settled on Friday (31 October) for $74 million, includes a leaseback period that will allow for Aurizon’s scheduled activities through to 2017. The transaction also has the flexibility to consider opportunities to negotiate other commercial sub-leases for rail-related or industrial activities.
Aurizon’s Redbank site is one of the largest rail maintenance facilities in Australia and occupies approximately 87 hectares of industrial land, adjacent to the rail corridor at Redbank, west of Brisbane. The facility manufactures and maintains parts for locomotives and wagons, and performs maintenance overhauls and repairs of freight locomotives and passenger trains.
The sale is consistent with Aurizon’s transformation strategy to reduce costs and improve productivity across its business, including disposal of surplus or non-core assets.
Aurizon currently has excess capacity for its maintenance activities in Queensland and is centralising the work to Rockhampton, which is closer to the majority of its services in central Queensland.
In May this year, Aurizon announced that a significant portion of work will cease at the Redbank facility in June 2015 (with the expiry of a passenger contract it performs for Queensland Rail), and then a progressive phase out of activities will occur through to June 2017 when it is proposed the workshop will close.
The other major Queensland site for heavy rollingstock maintenance, at South Townsville in North Queensland, is scheduled to close in June 2016. As a unique rail maintenance facility, Aurizon undertook extensive dialogue with a select group of rail related companies to divest the site as a ‘going concern’. Given the changing nature of the rail business, Goodman (as one of the largest industrial developers globally) provided a more commercially aligned proposition given their adjoining industrial development and diverse mix of tenants that may utilise intermodal activities.
Aurizon and Goodman Australia are also committed to exploring further strategic development opportunities across Aurizon’s national footprint which includes an extensive portfolio of assets and industrial sites.