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Aldi scraps big sheds, opens high-tech distribution hubs

German supermarket giant Aldi is ramping up efforts to take on rivals Coles and Woolies, telling staff it will build three new highly automated distribution centres and close six existing warehouses.

The grocery chain’s plans to accelerate the rollout of its new DCs – with significant changes expected as early as 2025 – will force a reckoning with one of Australia’s largest landlords, Charter Hall, which last year scooped up ownership of Aldi’s six existing warehouses in a hefty deal worth about $1 billion.

The grocery chain plans to accelerate the rollout of its new DCs.

The grocery chain plans to accelerate the rollout of its new DCs.Credit:Jacky Ghossein

At the time the deal was struck, Charter Hall’s purchase of Aldi’s warehouses was the second largest industrial transaction on record and added six top-tier warehousing facilities to a $6 billion fund jointly owned by Charter Hall Prime Industrial Fund and several Allianz companies.

Aldi offloaded all the warehouses in a sale and leaseback deal with seven-year leases in place, plus multiple seven-year options to extend its occupancy if required.

A spokesperson for Aldi confirmed that, at the beginning of this month, it had: “let our employees know we are in the very early planning stages to build three new fit-for-purpose distribution centres to serve the growing demands of our east coast operations.”

“There will be no significant changes to business operations until at least 2025,” they said. “Right now we are focused on informing and consulting with our people regarding our future plans.”

Those plans include scrapping its existing six purpose-built warehouses – two each in Victoria, NSW and Queensland – and replacing them with three new highly automated distribution centres.

Aldi would not be drawn on the location of the new centres, although staff were told there will be one in each of the three eastern states. It also refused to comment on whether it will commission, build and own the new facilities itself or structure a sale-and-leaseback deal with industrial landlords to house them on large-scale existing estates.

Retaining Aldi’s patronage among its extensive property holdings would be a coup for Charter Hall and would soften the blow of Aldi’s decision not to take up the lease options on its existing facilities. The 2020 transaction’s purchase yield of 4.75 per cent implies an expectation by Charter Hall that Aldi was likely to extend its leases.

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