ESR Australia Logistics Partnership (EALP), the new Australia-focused, core-plus logistics partnership launched by global logistics real estate firm ESR, has paid A$302.5 million ($220 million) to acquire a portfolio of 11 assets in Sydney, Melbourne, and Brisbane.
In a statement, the Warburg Pincus-backed logistics real estate firm said EALP acquired the portfolio of assets from Propertylink Australian Industrial Partnership (PAIP) II, an ESR-managed partnership.
The acquisition raises EALP’s AUM to more than A$1 billion ($728 million) and diversifies its portfolio with core-plus assets primarily located on the eastern seaboard of Australia. EALP’s portfolio now includes 36 properties with gross floor area of over 500,000 square meters.
“This transaction represents a great outcome for our investors in both investment vehicles and our business. The PAIP II investors achieving an exit in line with the fund’s original strategy, while EALP is able to add a quality portfolio of assets with a strong weighting to preferred markets of Sydney, Melbourne, and Brisbane to its existing portfolio,” said ESR Australia CEO Phil Pearce.
ESR launched EALP, a core-plus logistics partnership that seeks to raise A$1 billion (about $607 million) of equity, in March. The largest capital raising to date for ESR Australia, EALP is seeded with A$715.6 million ($435 million) of prime assets currently held on the firm’s balance sheet.
In September, ESR agreed to sell a further 35 per cent interest in EALP to a subsidiary of Singapore sovereign wealth fund GIC. ESR currently holds 20 per cent stake in EALP while Empire Trust 2, which is managed by GIC subsidiary Ausco Sargon 2, holds 80 per cent.
ESR has made substantial inroads into the Australian market in the last 12 months, the firm said. Apart from attracting significant capital via equity raisings, ESR Australia has also executed sales of non-core assets and recycled capital into strategic land banks to bolster its considerable development pipeline.
Listed in Hong Kong, ESR was formed in January 2016 by a merger between Shanghai-based warehousing service e-Shang and Singaporean logistics real estate investment firm The Redwood Group.