Singapore’s sovereign wealth fund GIC has acquired an additional 24 per cent stake in Dexus Australian Logistics Trust (DALT), an unlisted trust that invests in logistics properties in Australia, for A$366.1 million (about $252 million), according to a disclosure made by real estate developer Dexus.
The additional acquisition in DALT’s core portfolio raises GIC’s stake in the trust to 49 per cent, trimming Dexus’s stake to 51. The Singapore investor first took a 25-per cent investment in the core portfolio in November 2018 following the establishment of the A$2-billion ($1.45 billion) unlisted trust with Dexus.
DALT is an open-ended unlisted trust with an active acquisition and development mandate, seeded with assets from Dexus’s existing industrial portfolio and development bank.
The joint venture’s core portfolio has a weighted average lease expiry of 5.3 years and average occupancy by income of 98 per cent. It features a 97-per cent exposure to the strong performing Sydney and Melbourne markets and is weighted to traditional logistics facilities.
The establishment of the trust in November 2018 raised Dexus’s third-party assets under management to A$14.3 billion, encompassing a range of investment vehicles including diversified funds.
As DALT’s foundation investor, GIC was given the put and call rights to acquire an additional 24 per cent by June 2020 but the sovereign wealth fund exercised the option ahead of schedule.
“Settlement is expected to occur on 1 April 2020, with proceeds from the sale initially being used to reduce debt and provide capital for future funding commitments, including Dexus’s development pipeline,” Dexus told the Australian Exchange.
GIC’s move to increase its stake in DALT comes less than a year after it announced that it has offloaded an undisclosed stake in the A$1.8-billion ($1.2 billion) Sydney office skyscraper Chifley Tower to Australian property group Charter Hall.
The sovereign wealth fund was reportedly looking to offload a 50 per cent stake in the property for around A$900 million ($604 million), which it acquired for A$710 million ($512 million) in 2005.
Australia’s listed property market is forecast to continue to offer investors relatively stable returns, with some positive factors offsetting some of the negatives, to give minimal capital growth, according to the 2020 outlook released by boutique investment manager Atlas Funds Management.