The warehouse construction at the company's intermodal development on the outskirts of Sydney will commence in early 2018. Brokers observe securing a first tenant is an important step to prove up the value of Moorebank for investors and customers. A key risk is the appeals process which has commenced against the NSW government and Qube, that seeks to have the development approval for the project reassessed for refusal.

The planned equity raising is larger than Macquarie had anticipated, although the broker considers it a positive signal in relation to a further tenant announcement. The broker also believes the announcement should go some way to allaying fears around the near-term prospects for Moorebank. Citi also considers the capital raising suggests increased confidence in the ability to fill the warehouse footprint and rail throughput.

The company anticipates funding $400m in capital expenditure over the next five years from debt, cash and operating cash flow to develop Moorebank, and believes it makes sense to develop a self-owned warehouse in the early years and then potentially use external capital when rents and/or capitalisation rates reflect a premium rating for the precinct.