Singapore’s ARA Logistics Trust will invest in excess of $416m in a series of direct and indirect acquisitions with the Logos Group.
The sale replenishes LOGOs balance sheet and extends the groups involvement with its majority shareholder, ARA. Logos, which manages a $13.8 billion portfolio, is majority owned by ARA, alongside Canadian real estate fund manager Ivanhoe Cambridge and the platform’s founders, John Marsh and Trent Iliffe.
ARA will acquire five logistics properties located in Brisbane, including a development asset in Port of Brisbane which will have a combined value of $233 million and invest a further $183m to acquire interests in two Logos funds’; 49.5% in the New LAIVS Trust and 40.0% interest in the Oxford Property Fund, which hold a combined portfolio of five logistics properties in New South Wales and Victoria.
Commenting on the Proposed Acquisitions and Fund Investments, Ms Karen Lee, Chief Executive Officer of the Manager, said: “This is a transformational acquisition for ALOG as it expands our footprint across key economic hubs in the East Coast of Australia and paves the way for our next chapter of growth under LOGOS’ sponsorship.”
“The Proposed Acquisitions and Fund Investments, which comprise a portfolio of prime logistics properties, will not only strengthen ALOG’s portfolio, but importantly provide further income and geographic diversification, from an attractive market in Australia, which has stable fundamentals and strong growth potential. The Proposed Acquisitions and Fund Investments are also in line with the Manager’s disciplined execution of ALOG’s Portfolio Rebalancing and Growth Strategy to enhance the sustainability of ALOG’s earnings for our Unitholders,” Ms Lee added.
The Australian industrial and logistics market, especially the eastern seaboard cities, continues to be highly sought after by investors due to its strong market fundamentals, limited supply and favourable demographics.
Industrial and logistics investment volumes for the year-to-date ending August 2020 have exceeded A$3.5 billion for transactions priced above A$10.0 million, and 83% of these transactions had taken place during the COVID-19 period since mid-March 2020. The outlook for Australia’s industrial market remains stable over the long term, underpinned by the fundamental role of logistics in keeping basic day-to-day necessities of Australians in supply, unprecedented infrastructure investment and growth in defensive downstream industries such as e-commerce.
ARA’s latest acquisitions follows a string of large scale industrial transactions over the past few weeks including Mapletree Logistics $114m Brisbane acquisition, ESR’s $90m Acacia Ridge buy,
Equipped with modern specifications and situated at favourable locations, these properties are well positioned to capture the growing demand for prime logistics properties in key industrial precincts. The portfolios are 97.0% occupied and backed by a strong and reputable tenant base, which includes established names such as ACFS Port Logistics and Agility Logistics.
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ARA will also hold pre-emptive rights over the balance 50.5% and 60.0% stakes in the New LAIVS Fund and OP Fund, providing the potential to increase their position in those funds.
The blended yield of the portfolio was about 5 per cent, in keeping with the rise in industrial value.
The 5 directly held properties include cover 36.4ha and provide a WALE of 11yrs;
- 8 Curlew Street, Port of Brisbane
- 1-5 Bishop Drive and 2-6 Bishop Drive, Port of Brisbane
- 53 Peregrine Drive, Port of Brisbane
- Corner Heron Drive and Curlew Street, Port of Brisbane
- 47 Logistics Place, Larapinta
The 5 indirectly held assets are cover 66ha and provide a WALE 12.4 years
- 69 Sargents Road, Minchinbury
- 34-58 Marshall Court, Altona
- 11-14 John Morphett Place, Erskine Park
- 27-43 Toll Drive, Altona North
- 1 Hume Road, Laverton North
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