Deal of the Week: Ascendas bags GIC logistics portfolio

Representing the Asia Pacific’s second largest-ever industrial deal in Australia. GIC and Frasers Property Australia have sold their logistics portfolio for $1.073 billion.

The Singapore-based Ascendas Real Estate Investment Trust has purchased the portfolio of 26 prime, institutional grade logistics warehouses from Singapore’s sovereign fund, GIC and Frasers Property Australia, subject to approval from the Foreign Investment Review Board.

Chief executive officer of Ascendas, Tan Ser Ping, says the strategic investment establishes the investment trust as “the eighth largest industrial landlord in Australia” while diversifying Ascendas’ portfolio geographically.

The portfolio comprises more than 630,000 sqm of logistics assets, predominantly located along Australia’s east coast. Eighty three per cent of the portfolio is currently leased to blue-chip tenants including Coles, Toll, Kmart, Nestle and Pacific Brands.

JLL, which brokered the deal with Colliers International, says the five short-listed bidders were all offshore investors, with the high number of bidders demonstrating the weight of capital seeking exposure to Australia’s industrial market.

“We can equate the unsuccessful bidders to an aggregate of $10 billion of unsatisfied demand seeking exposure to Australian industrial assets,” says JLL’s head of industrial in Australia, Michael Fenton.

“The industrial sector continues to offer a yield premium to the office and retail sectors and lower volatility of returns relative to office markets,” Fenton adds.

At just over $1 billion, the GIC and Frasers Property Australia portfolio sale represents the second largest industrial deal in Asia Pacific. The largest was the sale by LaSalle Investment Management in 2012 of a logistics portfolio of 15 assets – JLF1 – in Japan for US$1.6 billion.