GIC in $2b venture to invest in Aussie logistics properties

The joint venture will acquire three development opportunities, including one at 27 Distribution Drive in Truganina, Victoria (right), with a total future completion value of A$500 million.
The joint venture will acquire three development opportunities, including one at 27 Distribution Drive in Truganina, Victoria (right), with a total future completion value of A$500 million.PHOTO: DEXUS

It is partnering Reit Dexus in joint venture; portfolio expected to generate steady income, GIC says

Sovereign wealth fund GIC and an Australian real estate trust have established a A$2 billion (S$1.99 billion) unlisted entity to invest in logistics properties Down Under.

GIC will be the venture's foundation investor, taking 25 per cent of the core portfolio, with rights to acquire an additional 24 per cent by June 2020. Partner firm Reit Dexus will initially hold the other 75 per cent.

GIC will also take an initial 49 per cent interest in the entity's A$1.4 billion seed development portfolio.

The joint venture - called Dexus Australian Logistics Trust - will be seeded with a logistics portfolio comprising mostly core facilities in "strong performing precincts" with "good access" to major arterial roads, rails and ports, mostly in Sydney and Melbourne, GIC said yesterday.

The weighted average lease expiry of the portfolio is 5.3 years with occupancy at 98 per cent.

In addition, the joint venture will acquire three development opportunities with a total future completion value of A$500 million. It will continue to target core logistics properties in Australia, said GIC.

Mr Lee Kok Sun, chief investment officer of GIC's real estate division, said: "This investment reflects GIC's confidence in the long-term potential of Australia's logistics sector.

The joint venture - called Dexus Australian Logistics Trust - will be seeded with a logistics portfolio comprising mostly core facilities in "strong performing precincts" with "good access" to major arterial roads, rails and ports, mostly in Sydney and Melbourne, GIC said.

"We believe the structural and consumption growth in Australia, particularly from favourable demographics and growth in e-commerce, will continue to drive demand for logistics properties."

He added that the portfolio of "quality assets in strong locations" is well positioned to capitalise on this and generate steady income over the long term.

A version of this article appeared in the print edition of The Straits Times on November 27, 2018, with the headline 'GIC in $2b venture to invest in Aussie logistics properties'. Print Edition | Subscribe