ESR Australia increases logistics investments with new commitments

ESR Asutralia increases logistics investments with new commitments

ESR Australia is expanding its core plus logistics strategy with a A$600 million commitment to the newly established ESR Australia Logistics Partnership II (EALP II).

ESR Cayman said Thursday ESR Australia has secured an initial commitment from investors of A$480 million (circa US$353 million) to EALP II, an extension of EALP.

EALP I was launched with a seed portfolio valued of A$715 million (circa US$527 million) in May 2021, growing via acquisition and development to a portfolio with a forecast end value of circa A$1.6 billion (circa US$1.2 billion).

EALP I holds 33 assets in strategic locations, including The Iconic’s fulfilment centre in Yenorra and Bringelly Road Business Hub and Developments such as Clayton Business Hub and Sherbrooke Industrial Estate in Willawong. Fund assets account for over 500,000 sqm of GFA, with circa 200,000 sqm of development opportunities.

“Following the successful deployment of the initial equity committed to EALP and the continued positive outlook for the logistics sector in Australia, we felt confident to commit an additional A$600 million to the core plus strategy via the launch of EALP II,” said Phil Pearce ESR Australia CEO.

M&G Investments commits A$200 million to EADP

In addition to the launch of EALP II, M&G has committed A$200 million to ESR Australia Development Partnership(EADP). Following M&G’s commitment, ESR and GIC will hold 40% each and M&G 20%.

Launched in June 2020, with A$1 billion (circa US$737 million) of equity commitments, EADP is a develop-to-hold logistics strategy with cornerstone investor GIC committing 40% of the equity. At the time of launch, EADP was seeded with two Western Sydney projects, Horsley Logistics Park and Leppington Industrial Estate.

The partnership has since acquired Acacia Ridge Business Park in Queensland along with a 79-ha site in Cranbourne, Victoria. Since the launch of the partnership, ESR has secured several pre-commitments from groups such as UPS, PACT, and SPAR.

EADP currently has A$270 million (circa US$198 million) AUM and a pipeline of developable land of 81,000 sqm, with an anticipated end value of A$1.1 billion (circa US$808 million).

Pearce said: “We are pleased to have M&G on board as a partner in EADP. Their A$200 million commitment further demonstrates ESR Australia’s ability to attract new capital, backed by an evergrowing track record of successful development projects in the local market.”

Jingdong Lai, CIO and interim CEO at M&G Real Estate Asia, said: “The logistics sector is a high conviction theme for our real estate portfolios, and Australia is a core market for us in Asia Pacific. Extending our strategic partnership with ESR in this highly competitive market grants us exposure to a high quality and modern portfolio of assets to invest in over the long term.”