Development of future Melbourne hub progresses with strategic sale
Global law firm K&L Gates recently advised Orica on divesting around half the surplus land holdings at its 130-hectare development site in Deer Park, Victoria. The transaction was valued at AU$260 million and saw around 66 hectares sold to UniSuper, an investment vehicle for superannuation funds.
According to a statement from K&L Gates, the deal required intricate pre-sale work, including the remediation of existing environmental issues, a subdivision of the land, and the promise to complete a series of infrastructure projects to support the development of the initial and subsequent stages of the site.
The agreement also included other financial arrangements, ensuring over AU$28 million in infrastructure developments and an immediate, fully realised capital payment, with provisions to safeguard the value of the transaction against potential delays.
Orica’s Deer Park development is set to become one of Melbourne’s largest commercial and industrial areas and will be utilised for “a high-quality master planned precinct.”
The legal team advising Orica was led by Randall Gerkens, a real estate partner based in Melbourne. He worked alongside the firm’s Melbourne real estate team and Matthew Cridland, a partner specialising in duty and indirect tax. Charter Keck Cramer also acted as commercial advisors on the transaction.
Peter Hutchins, the chief executive of Charter Keck Cramer, offered a statement on the challenging nature of the deal.
“The requirements for partial upfront capital release and preservation of the deal value (despite subdivision delays) really pushed the envelope,” he said. “The expertise, attentiveness and dedication of Randall and the K&L Gates team were instrumental in achieving our commercial goals through the process.”
Gerkens similarly reflected on the project's complexity, noting the historical significance of the site and the multifaceted challenges presented by the subdivision and remediation efforts.
“The site’s history and the need to navigate the subdivision and remediation issues as well as deliver on Orica’s commercial objectives meant we faced a series of challenges through the process, but Orica's internal team (legal, property and remediation in particular) along with commercial adviser, Charter Keck Cramer, always worked seamlessly with us to achieve the best possible results,” said Gerkens.
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