Silk Logistics Holdings Limited announced it has novated the land purchase contract for the 11-hectare greenfield site in Kemps Creek, NSW to ESR Australia ("ESR") ("Novation"). As announced on 4 November 2021, Silk entered into a contract to acquire the greenfield site for cash consideration of $58.0 million and outlined plans to identify a take-out party to transfer the land purchase contract and development risk of the site. The Novation achieves this strategic objective.

Silk will receive an up-front cash amount of $13.55 million in connection with the Novation (which includes a reimbursement of the $5.8 million deposit, stamp duty of $3.2 million and other costs incurred by Silk). As part of the Novation arrangements, Silk has entered into an agreement for lease with ESR ("AFL") under which it may enter into a 10-year lease for purpose-built warehouses on the Kemps Creek site. Under the terms of the AFL, with the exception of fit-out works which will be undertaken by Silk, ESR is responsible for the construction and associated build costs of the warehouses.

The long-term lease is due to commence following practical completion, which is scheduled for 2HCY24.