Lendlease & MSREI Acquire $430m Deal

Lendlease and Morgan Stanley Real Estate Investing have acquired a portfolio of eight assets from a private logistics group, in a $430m deal.

The 50/50 joint venture will take over a portfolio of existing and development assets with private group, EMKC continuing to be responsible for management and development of the portfolio.

The five operational assets in the portfolio are leased on 15-year terms and comprise 100,000 sqm, in Richlands in QLD, Glendenning in NSW, Altona North in Victoria and Salisbury South in South Australia. The portfolio includes three development sites at Altona North and Truganina in Victoria and Lytton in Queensland.

Scott Mosely, Managing Director, Lendlease Investment Management said “The industrial sector has been a strong performer for Lendlease and this acquisition provides additional scale and diversity to our industrial platform with development opportunities that are increasingly attractive to our investors. We aim to grow this platform over time with a focus on develop to core assets, including further potential opportunities with EMKC.

“The sector has experienced strong tailwinds over recent years that continue to accelerate. The growth in e-commerce, improvements in automation and the demand for last mile logistics and pick-up convenience for shoppers are key themes that will continue to drive growth.”

Edward McKenna, Director and Co-Founder, EMKC said, “EMKC is delighted to be partnering with Lendlease and Morgan Stanley Real Estate Investing for the development and growth of the new joint venture industrial platform. With a strong focus on medium to large format industrial and logistics development across the East coast of Australia, EMKC is well placed to provide an ongoing pipeline of develop to core assets for the partnership over the coming years.”

Lendlease said the intention is to grow the joint venture through the acquisition of develop to core industrial assets provided through pipeline opportunities sourced by Lendlease and its development manager EMKC.

Lendlease will seek to sell down part of its 50% share over time to institutional capital partners and maintain a co-investment stake.

Last month, Lendlease acquired three industrial assets from a separate Morgan Stanley Real Estate Investing JV with Mirvac for $161m. Those assets were held in a 10-90 Mirvac-MSREI partnership known as Mirvac Industrial Logistics Partnership.

Lendlease said the fully-occupied assets were located in Campbelltown, in Sydney’s Southwest, and in Melbourne’s Altona, which houses Melbourne’s key logistics precincts.

The two Melbourne assets adjoin existing APPF Industrial holdings, offering the potential to expand lot sizes, improve amenity and enable future development through a variety of site consolidation options. The acquisition increases the Lendlease-managed Australian Prime Property Industrial Fund portfolio to a total of 39 assets, valued at around A$1.6bn

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About Warwick Petschack

Warwick has over 25 years of property investment and management experience. Principally responsible as Managing Director for Capital Management Australia and Joint Managing Director for Chauvel Capital Partners and Editor of Australian Property Markets News.

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