Australia’s largest logistics real estate transaction has been recorded after ESR Australia’s $A3.8 billion acquisition of Blackstone’s Milestone Portfolio.
ESR Australia partnered with Singapore-based GIC as its capital partner for the acquisition, which was partaken under a newly formed investment vehicle “ESR Milestone Partnership” (EMP) – the deal will see ESR contribute 20 per cent of the equity.
ANZ Banking Group, Mitsubishi UFJ Financial Group, Standard Chartered and United Overseas Bank are also providing fully underwritten debt facilities for the acquisition of the real estate assets.
The platform sale, which JLL advised in partnership with Eastdil Secured, comprises 45 assets held by Blackstone’s Milestone logistics portfolio – including properties in Sydney, Melbourne, Brisbane, Adelaide and Perth.
JLL chief executive of capital marketers in Asia Pacific Stuart Crowe congratulate ESR, GIC and Blackstone on the landmark deal. adding it was a reflection of the country’s industrial sector.
“The Australian logistics market is very attractive to global investors, with the sector viewed as one of the most dynamic and resilient asset classes globally. Increasingly, we are seeing opportunities for investors to expand their exposure in logistics through platform deals,” he said.
JLL head of capital markets, industrial and logistics in Australia Tony Iuliano said the $A45 billion of capital came from a combination of sovereign wealth funds, pension funds, REITs and life insurance groups.
“This transaction is a transformational event and one which will most likely never be seen again in logistics,” he said .
“It’s history in the making and a transformational transaction for Australian real estate. The opportunity to access over 90 tenants and a management platform with significant IP is enormous for any group.”
ESR Australia chief executive Phil Pearce described the involvement in Australia’s largest logistics real estate transaction as transformative, with the sale providing the business with immediate scale.
“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,” he said.
“The portfolio is land rich, with low site coverage of only 38 per cent, providing plenty of opportunity for ESR to redevelop these assets over time.”