ESR launches A$1 billion Australian logistics fund

ESR launches A$1 bn Australian logistics fund, GIC commits A$400m

ESR Cayman Limited (ESR), the APAC focused logistics real estate platform, has launched the ESR Australia Development Partnership (EADP), a new Australian develop-to-hold logistics fund.

With a target fund size of A$1 billion (circa US$692 million), GIC has committed A$400 million (circa US$277 million) as the cornerstone investor.

EADP will focus on strategically located sites that benefit from infrastructure or proposed infrastructure upgrades in the eastern seaboard cities of Sydney, Melbourne and Brisbane in Australia.

EADP is to be seeded with two prime land parcels within the Sydney metropolitan area contracted over the past 12 months as part of ESR Australia’s land bank strategy for a total consideration of A$190 million (circa US$131 million). The seed land parcels will be developed into premium logistics assets with an end value of approximately A$410 million (circa US$284 million).

  • ESR Horsley Logistics Park is a 20.8 ha site purchased from CSR in late 2019 and destined to become a premium distribution park with a total GFA of circa 110,000 sqm.
  • The 8.7 ha ESR Leppington Industrial Estate which is well positioned in South West Sydney and set tobenefit from the new Western Sydney Airport and infrastructure upgrades will provide GFA of circa 40,000 sqm of prime warehouse space.

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“We continue to see increasing appetite from our capital partners for logistics assets as the asset class looks to benefit from the growth in adoption of online shopping, a trend which we believe will accelerate. The success of our capital recycling and asset light strategy combined with the growing demand for logistics space, and emerging opportunities in adjacent areas such as data centres, makes me very optimistic about the prospects for ESR Australia,” said Phil Pearce, CEO of ESR Australia.

Jeffrey Shen and Stuart Gibson, Co-founders and Group Co-CEOs of ESR said, “We are very pleased with the momentum, quality of assets and capital relationships that Phil and our Australian team have developed in such a short period of time. The successful capital raisings of EADP and other vehicles, together with the acquisitions of prime sites and projects, have further strengthened ESR’s position and ability to provide investors and customers with a distinguished network and portfolio to tap into the secular growth opportunities across the APAC region.”