The trust will buy five logistics properties located in Brisbane, including a development asset, at the Port of Brisbane, for about $S225.9m.
Singapore-based ARA LOGOS Logistics Trust has confirmed that Australia’s industrial property boom is running hot by snapping up a $S404.4m ($418m) parcel of properties along the east coast.
The company joins Singaporean rivals including Ascendas and Mapletree, as well as international fund managers, which have made inroads into the industrial property sector even as the coronavirus pandemic hit other areas.
Warehouses and distribution centres have been relatively unaffected, with some smaller tenants struggling to pay rent but larger organisations stepping up investment into their supply chains.
Local firms have also been active in logistics property with Charter Hall snaring the Aldi distribution centre portfolio and Centuria also buying assets.
All up, industrial and logistics investment volumes from January to August have topped $3.5bn and about 83% of these transactions had taken place during the pandemic.
The purchases are partly driven by the appetite of investors for warehouses but also point to the fragility of other areas of commercial property including large shopping centres and city office towers.
ARA Logos said the outlook for Australia’s industrial market remained stable over the long term, underpinned by the fundamental role of logistics in supplying the basic necessities to Australians, unprecedented infrastructure investment and growth in defensive downstream industries such as e-commerce.
The manager of the trust, Karen Lee, dubbed the purchases transformational. She said the trust was expanding its footprint across key economic hubs in the east coast of Australia.
She said the deal paved the way for the next chapter of growth under Logos’s sponsorship and gave the fund further income and geographic diversification. Ms Lee said Australia was an “attractive market” with stable fundamentals and strong growth potential.
The trust will buy the properties from Logos Property Group-managed ventures. It will buy five logistics properties located in Brisbane, including a development asset, at the Port of Brisbane, for about $S225.9m.
It will also take a 49.5% interest in one Logos-run fund and a 40% interest in the firm’s Oxford Property Fund. They have a combined portfolio of five logistics properties in NSW and Victoria, for a price of $S178.5m.
The Singapore trust is positioned to eventually take out the local vehicles as the deal includes pre-emptive rights over the balance of 50.5% and 60% stakes in the funds respectively.
The blended yield of the portfolio was about 5%, in keeping with the rise in industrial values.
The assets being bought are prime logistics properties that have long leases and are embedded in the heart of industrial hubs across the eastern seaboard cities of Brisbane, Sydney and Melbourne, near highways, central business districts, airports and seaports.
The Australian industrial and logistics market, especially the eastern seaboard cities, is being chased by global investors due to its strong market fundamentals, limited supply and favourable demographics.
Logos has more than $13bn of assets under management.
