GIC buys majority EALP stake from ESR Australia

Singapore sovereign wealth fund GIC will hold an 80 per cent stake in the ESR Australia Logistics Partnership (EALP) after ESR Australia sold part of its share.

The Hong Kong based vendor will retain a fifth.

GIC’s interest will increase from 45pc.

“The selldown of the remaining 35pc of EALP is in line with the strategy outlined at the time EALP was established,” an ESR Australia statement said.

“Completing the capital raising for EALP and the recent closing of ESR Australia Development Partnership (EADP) sees ESR Australia in a strong position to continue its expansion into the Australian logistics market via acquisition of income producing assets as well as continuing to expand its development pipeline”.

Between EALP and EADP, ESR Australia holds assets worth $1 billion.

But ESR Australia has flagged its EADP stake – again with GIC – would also reduce to about a fifth (story continues below).

Asset class a beneficiary of consumer behaviour: ESR

EALP’s gross assets are worth c$750m, which ESR Australia expects will rise to $1b by December.

ESR Australia chief executive officer added the group is “experiencing strong demand from our capital partners for opportunities in industrial and logistics property”.

“This asset class is a beneficiary of the change in consumer behaviour, such as the move to online shopping, as well as retailers seeking to hold higher levels of inventory, both due to the COVID-19 pandemic,” he added. “Being part of the largest logistics real estate group in APAC means we can source capital through key relationships in the region to support domestic operations, allowing us to contribute to Australia’s domestic growth and provide substantial benefit for local communities”.

“GIC’s increased stake in EALP reaffirms its commitment to our strategy of investing in a portfolio of premium logistics properties,” according to the executive. “This is both a validation of the growth that ESR Australia has been able to deliver for its investors, as well as an endorsement of our team and the quality of our platform”.

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Marc Pallisco

A former property analyst and journalist, Marc is the publisher of realestatesource.com.au.

Marc Pallisco