ADIA and ESR Sell Stake in Australia’s Logistics Sector
Japan’s Hankyu Hanshin Properties Co., Ltd., has announced that it will acquire 11 properties from an Australia’s logistics real estate leasing and development portfolio, through its subsidiary Hankyu Hanshin Properties Australia Pty Ltd (HHPAUS) for $2.2 billion.
The portfolio is a joint venture and includes Australia’s ESR Group, a wholly-owned subsidiary of Abu Dhabi Investment Authority (ADIA) LOGOS Australian Logistics Venture (LALV), a Japanese-managed vehicle and an unnamed Malaysian fund by HHPAUS and two other Japanese companies – Mitsui O.S.K. Lines and Kintetsu Real Estate Co – are scheduled to invest in the Fund, which was established around two months ago.
These assets (43 buildings) measuring 860,000 sq.m. are spread over four cities in Australia – four in Sydney, three each in Melbourne and Brisbane and one in Perth, HHPAUS said.
According to Australia’s daily The Australian, which reported the deal first, Hankyu Hanshin, together with the Malaysian investor, are paying a combined $362.08 million for their stake.
“The property complex consists of 11 logistics properties (43 buildings) consisting of rental and newly developed properties. All of the properties are located in locations ideal for logistics in various cities in Australia, and have excellent specifications such as floor load and ceiling height,” Hankyu Hanshin said.
“HHPAUS will organise and manage the fund, thereby aiming to increase the value of the properties…and by providing investment management services for the fund, will also meet the needs of investors,” the Japanese firm said.
Hankyu Hanshin’s latest investment is second in Australia when it participated in a fund led by Mitsubishi Estate and Sydney-based AsheMorgan, which in October 2023 acquired the 60 Margaret Street commercial tower in Sydney from Blackstone and Mirvac for $524.89 million.
Logos Assets in Play
According to a report published in Mingtiandi, a real estate news website, the sale of the stake in LALV marks ESR’s second major Aussie logistics transaction involving a Japanese investor in two months after the industrial giant in August set up a JV with Mitsubishi Estate for $118.22 million industrial estate.
ESR in July acquired the remaining interest in LOGOS held by the developer’s founders, having concluded deals to acquire the 13.6% equity stake held by co-founders and co-CEOs Trent Iliffe and John Marsh along with former Southeast Asia head Stephen Hawkins.
Established in late 2014 by ADIA and Aussie industrial developer LOGOS, LALV came under ESR management in early 2022 following the group’s $5.2 billion takeover of Singapore-based ARA Asset Management, which had acquired a majority stake in Logos in 2020.
ADIA made an additional equity commitment in March 2022 to LALV, which at the time consisted of nine properties with a total end value of $2.5 billion, including a major stake in a site in Mascot, near Sydney Airport.
Aussie Logistics Heats Up
Citing a report from Cushman & Wakefield, Mingtiandi also said that Hankyu Hanshin ‘s acquisition comes as Australia saw $1.76 billion of industrial transactions in the second quarter, marking the strongest three-month period for the sector since April through June 2022 and exceeding the ten-year quarterly average of $1.15 billion, according to a July report from Cushman & Wakefield.
In July, Goldman Sachs Asset Management acquired seven last-mile logistics properties across Australia for a reported $135.11 million, while a JV of PGIM Real Estate and ASX-listed fund manager Elanor Investors Group agreed to buy a last-mile logistics site in a Melbourne suburb, reportedly for the same amount.
