GIC, ESR launch third Australian logistics fund with $408m commitment

Singapore’s sovereign wealth fund GIC and Warburg Pincus-backed ESR have set up the third core-plus fund for Australian logistics properties, Australia Logistics Partnership III (EALP III), with a committed equity of A$600 million ($408 million), according to a release on Friday.  

GIC, which is the cornerstone investor, is contributing to 90% of the fund and 10% will be injected by ESR, a representative from ESR told DealStreetAsia in a phone interview. GIC declined to comment on the topic.

GIC and ESR’s third vehicle is already conducting due diligence on a number of initial seed assets for the fund, according to Phil Pearce, CEO of ESR’s Australian arm. The fund will target warehouses in first- and second-tier cities in Australia such as Sydney, Melbourne, and Brisbane, said ESR’s spokesperson.

“We are pleased to expand our long-term partnership with GIC on EALP III as it reflects our collective confidence in ESR’s ability to capitalise on the growing set of opportunities across APAC and especially in Australia. As the largest real asset manager in APAC, ESR’s integrated fund management platform has provided our capital partners with access to some of the world’s best secular growth opportunities propelled by the positive trends of e-commerce and digital transformation,” said Stuart Gibson and Jeffrey Shen, co-founders and co-CEOs of ESR Group. “We look forward to leveraging our proprietary ecosystem of relationships to identify off-market transactions as well as leveraging our strong in-house development, asset and property management teams to create value for our investors and stakeholders.”

The open-ended fund is a continued effort of the GIC-backed prequel fund, ESR Australian Logistics Partnership II (EALP II), which has fully allocated $600 million in equity commitment, the release stated. The second instalment includes the largest-ever logistics and portfolio transaction in Australia that the partners secured from US-based private equity juggernaut Blackstone for A$3.8 billion ($2.9 billion) in April last year.

The alliance first kicked off the fund series with Partnerships of ESR Australian Logistics Partnership I (EALP I) in March 2022 with A$600 million ($408 million) committed equity. 

The predecessor funds have invested in accumulative assets under management of 682,016 square metres (7,341,159 square feet) across different cities in the nation.

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