Hong Kong-listed logistics real estate group ESR has agreed to purchase the largest Australia logistics portfolio of US-based fund manager Blackstone to the tune of A$3.8 billion (US$3 billion).
The acquisition of Blackstone’s Milestone Logistics portfolio will be carried out by ESR Milestone Partnership, a newly formed venture between ESR and Singapore sovereign wealth fund GIC, where ESR will contribute 20 percent.
The company said the deal, valued at US$3 billion, represents the most significant logistics portfolio transaction in Australia. It will also see ESR become the third largest logistics landlord in Australia, with assets under management of A$7.9 billion.
The transaction encompasses 45 high-quality, income-producing assets across Australia’s major capital cities, covering a land area of 3.6 million square metres and gross leasable area of 1.4 million square metres.
Milestone’s clientele include Woolworths, Lineage Logistics, Toll (Japan Post), Daimler Benz, Australia Post, Mazda and WesTrac.
“The opportunity to secure such a large portfolio with extremely well-located assets across Adelaide, Brisbane, Melbourne, Perth and Sydney, strategically positions EMP to benefit from the continued growth in demand for warehouse space, particularly as the robust demand for logistics real estate is expected to remain strong due to sustained growth in e-commerce,” ESR Australia CEO, Phil Pearce said.
“The portfolio is land rich, with low site coverage of only 38%, providing plenty of opportunity for ESR Australia to redevelop these assets over time,” he added.
The transaction is subject to approval by the Foreign Investment Review Board (FIRB), the company noted.
ESR operates in China, Japan, Singapore, South Korea, India and Australia with over US$29.9 billion in assets under management across 20.1 million square metres of real estate and land.