QUBE Holdings has announced it has made two lease and development management agreements with supermarket Woolworths for new warehousing at Moorebank Logistics Park.
Both leases, comprising a 40,700sqm national distribution centre and a 34,600sqm regional distribution centre, are on initial 20-year terms with six five-year options.
The new facility for Woolworths is to consolidate operations into a purpose built high bay facility, leveraging advancements in retail, supply chain and semi-automated and automated technology.
The NDC is expected to start operations in 2023 with the RDC opening in 2024, with the facilities anticipated to reach full capacity from 2025.
Under the two development management agreements, Woolworths is developing the warehouses and Qube is funding their construction.
Qube’s capital commitment for the base building construction is expected to be between $420m and $460m which will be incurred over the next three to four years with revenue of about $30m a year when fully operational.
Woolworths Group is to invest around $700m and $780m in the technology and fitout of the two distribution centres over the next four years.
The development of the two facilities will provide more than 1,000 construction jobs prior to the commencement of the new operations.
An air bridge between the sites will reduce transport requirements by allowing NDC pallets to be cross docked to the RDC removing shuttle transport and allowing product to be efficiently received and processed between the distribution centres.
Each warehouse is targeting a Five Star Green Star Design and As-Built rating and will incorporate various sustainability initiatives including solar PV systems, LED warehouse lighting and rainwater harvesting.
Qube managing director Maurice James said they were delighted Woolworths had recognised the competitive advantages of Moorebank.
“The benefits of railing containers direct from Port Botany to a terminal co-located with warehousing across a site the size of the Sydney CBD will deliver Woolworths time and cost efficiencies” he said.
“Our project team is looking forward to working with the Woolworths team in delivering an optimal solution for their operations.
“Woolworths’ long term commitment will reinforce the commercial appeal of this nationally important infrastructure and freight project.”
Woolworths Group CEO Brad Banducci said the Moorebank investment would transform the way they served their NSW stores.
“The new facilities will help us improve on-shelf product availability with faster restocking, reducing congestion in stores, and enabling a safer work environment for our teams with less manual handling,” Mr Banducci said.
The Australian Logistics Council says the decision by Qube and Woolworths to invest at Moorebankwould help deliver a multitude of efficiency, safety, productivity and environmental benefits.
“This announcement represents a major step in harnessing the power of world-leading technology to deliver a wide range of supply chain benefits, for businesses and consumers alike,” said ALC CEO Kirk Coningham.
“ALC has been a long-time advocate for the development of the Moorebank Logistics Park and its direct rail connection to Port Botany. This allows more freight to be moved via rail, helping to alleviate road congestion, which in turn delivers environmental benefits through reduced emissions.”