ESR-REIT completes maiden overseas acquisition
ESR Cayman Limited (ESR) and ESR Funds Management (S) Limited (ESR-REIT) have completed the acquisition of 10.0 per cent of the total issued units in ESR Australia Logistics Partnership (EALP) by RBC Investor Services Trust Singapore Limited (in its capacity as trustee of ESR-REIT) for a purchase consideration of AUD60.5 million (approximately SGD62.4 million and USD46.6 million.
This marks ESR-REIT’s first acquisition from the Sponsor’s pipeline as well as its first overseas expansion.
EALP, which comprises 37 prime logistics properties all located in Australia, is a private fund managed by ESR Asset Management (Australia) Pty Ltd, an indirect subsidiary of ESR. Currently, ESR Queensland Hold Trust holds a 20.0 per cent interest in EALP, with the remaining 80.0 per cent interest in EALP held by a wholly owned subsidiary of GIC (Realty) Private Limited (GIC), whose primary business is to hold real estate investments of the GIC Private Limited, a global investment firm established in 1981 to manage Singapore’s foreign reserves. Following the completion of the Australia Acquisition, ESR Queensland Hold Trust and ESR-REIT will each hold a 10.0 per cent interest in the Fund, with GIC holding the remaining 80.0 per cent interest in EALP.
Jeffrey Shen and Stuart Gibson, ESR Co-founders and Co-CEOs, says: “As the Group’s premiere pan-Asia REIT vehicle, ESR-REIT remains an integral part of our rapidly expanding new economy real estate platform. We remain committed to ESR-REIT and its long-term growth by providing it with continuous access to our strong portfolio of best-in-class logistics properties valued at approximately USD27 billion across the APAC region, as well as financial and operational support as it continues to scale up. While structural changes stemming from the pandemic are driving REITs to transform their portfolios in response to the acceleration of e-commerce and shifts in global supply chain management, we are confident that our continued commitment and support will ensure ESR-REIT is well positioned to tap into the rising demand for quality logistics infrastructure and thrive on the transformation of the market.”
Adrian Chui, Chief Executive Officer and Executive Director of the Manager of ESR-REIT, says: “With the continued growth in demand for quality logistics facilities underscored by the sustained momentum in e-commerce, we are in a good position to be able to leverage our Sponsor’s strong network of quality pipeline opportunities and operational expertise to accelerate our expansion overseas. Complementing our investment strategy, EALP presented a unique opportunity to access a portfolio of high quality freehold assets to diversify our portfolio geographically and capitalise on the robust logistics market in Australia to strengthen our portfolio.”
In addition to the Australia Acquisition, the Manager of ESR-REIT announced the proposed acquisition of 46A Tanjong Penjuru, a modern in-demand ramp-up logistics facility well-located in the western central area of Singapore that is expected to complete within this year. The proposed acquisition coupled with the Australia Acquisition will scale up ESR-REIT’s logistics exposure in the face of a significant demand in quality warehouse space. As part of ongoing efforts to optimise its portfolio, the Manager of ESR-REIT also announced that 16 Tai Seng Avenue and 7000 Ang Mo Kio Avenue 5, two high-specifications properties, will be undergoing asset enhancements initiatives to develop unutilised plot ratio to increase gross floor area.
“Since coming onboard as the Sponsor of ESR-REIT in 2017, ESR has demonstrated a strong alignment of interest with the REIT and its unitholders by providing financial commitment through a series of backstops for all of our equity fund raising activities, including the upcoming Preferential Offering. With our Sponsor’s continued support, this will enable ESR-REIT to further capture strong opportunities in key regional markets in which it has a well-established presence, delivering greater income stability and long-term growth for our unitholders,” adds Chui.