Blackstone buys GIC's $2.05 billion stake in Australian logistics venture

SINGAPORE (BLOOMBERG) – Blackstone is acquiring a stake in an Australian logistics trust from Singapore sovereign wealth fund GIC for A$2.1 billion (S$2.05 billion), in a bet on rising e-commerce demand in the country.

The US buyout firm is adding 77 premium-grade logistics assets located in Sydney and Melbourne into its portfolio with the acquisition of a 49 per cent stake in Dexus Australian Logistics Trust, Mr Alan Miyasaki, Blackstone’s head of Asia real estate acquisitions, said in an interview.

The deal adds to the private equity firm’s bets on warehousing globally after it last month acquired a portfolio of properties in Europe and the United States from Cabot Properties for US$2.8 billion (S$3.8 billion). Rising demand for such assets due to growth in e-commerce, coupled with lockdowns and subsequent virus curbs in various countries, has slowed the ability to deliver new supply quickly, Mr Miyasaki said.

“When you see that supply and demand imbalance, that’s usually a pretty good opportunity for future growth in the portfolio,” he said.

Blackstone’s latest purchase is its largest investment in Asia under the almost US$100 billion “core plus” strategy, which focuses on long-term investments in developed markets and is the biggest driver of fee-related earnings at the firm.

The deals add to its earlier purchases in Asia including Lucasfilm’s state-of-the art Singapore business park The Sandcrawler for $176 million, and 38 residential assets in Japan’s cities of Tokyo and Osaka.

Dexus Australian Logistics Trust is a joint venture set up in 2018 between Dexus, an Australian real estate investment company, and GIC.

Industrial and logistics proved to be the most resilient asset class in Asia-Pacific real estate in the third quarter, underpinned by strong demand for safety stock to guard against supply chain disruptions, according to research from real estate consultancy CBRE published in November. Outperforming markets include Sydney, Singapore, Hong Kong, Melbourne and Shenzhen.

Blackstone zeroed in on the deal because of Australia’s potential e-commerce growth, Mr Miyasaki said. The nation’s market for online purchases is expected to grow by 13.4 per cent to reach A$60.6 billion this year, according to an October report by data analytics firm GlobalData. As the pandemic accelerates the shift to online sales, that figure is expected to jump to A$91.5 billion in 2025.

“This is a big portfolio and a very large capital investment,” Mr Miyasaki said. “That’s difficult to replicate in many countries where there is limited scale to the existing stock.”

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