Warburg Pincus-backed ARA Asset Management has agreed to sell its entire 10 percent stake in a Singapore-listed logistics REIT to Logos Property, parting with its ownership in the real estate trust’s manager as part of the same transaction, according to an announcement to the stock exchange late last week.
Financial details of the sale of the units in Cache Logistics Trust and the stake in the REIT manager were not disclosed, however, units in the listed trust were priced at S$0.72 at the close of trading on 11 December, just before the deal was announced. At the end of the 2018 fiscal year, Cache Logistics Trust had 1.0778 billion units in issue, making ARA’s stake in the trust worth approximately S$77.6 million ($57.33 million).
In the announcement, Daniel Cerf, CEO of ARA Trust Management (Cache) Ltd, which manages the REIT, said that the transaction, which remains subject to regulatory approval and other conditions, was entered into “to establish a best-in-class logistics real estate development and investment management partnership in the Asia Pacific region.”
In the statement, Cerf also noted that, following completion of the stake sale, which is expected during the first quarter of 2020, ARA would retain control of the trust’s manager through Logos. Representatives at ARA and Logos declined to comment on how the two companies planned to cooperate with regard to the management of Cache in the future.
Logos Adds Holdings in Target Markets
The transaction, which sees ARA divesting its interest in its sole logistics-focused REIT, allows Logos to expand its holdings in Australia and Singapore, a pair of markets which have been among the nine-year-old company’s major areas of focus. ARA manages a total of six listed trusts in Hong Kong and Singapore.
Cache’s portfolio included 27 logistics properties as of 30 September this year, with 10 of those in Singapore and the remaining 17 in Australia. The trust’s set of warehouse facilities covers approximately nine million square feet (836,000 square metres) and is valued at around S$1.31 billion, according to the manager’s statement.
The REIT’s most recently acquired asset, and the only property acquired during ARA’s control of the REIT manager, was a single-storey warehouse facility in Victoria, Australia, which Cache agreed to acquire in March of this year for A$41.2 million (now $28.3 million).
ARA had acquired full ownership of Cache’s trust manager from Singapore’s CWT (now a unit of HNA) in June 2018, in a deal which also gave chairman John Lim’s real estate investment specialist ownership of the trust’s property manager. ARA’s most recent announcement did not mention the future ownership of the property manager.
Seoul-based private REIT, ARA Korea Global REIT I, which is managed by ARA’s Korea unit and is described as investing in shares of Cache Logistics Trust, was not mentioned in the trust manager’s most recent announcement.
Logos Adds Assets in Singapore and Australia
With offices in Sydney, Shanghai, Singapore and India, Logos has been focusing much of its efforts in the past two years on building up its footprint in Southeast Asia and Australia, with the company’s assets under management now standing at A$9 billion, according to its website.
In September the firm founded by property veterans John Marsh and Trent Iliffe opened stage one of its A$230 million Marsden Park Logistics Estate near Sydney, with that distribution centre debuting just six months after the firm purchased two hectares of industrial land in western Sydney to expand an existing facility in Prestons Logistics Estate.
In January of this year, the APAC-focused developer signed a sale-and-leaseback deal with solar firm REC to take possession of a 151,810 square metre (1,634,000 square foot) integrated manufacturing and warehouse facility in the Tuas South region of Singapore, after making a series of acquisitions in the city state last year.
Warburg Pincus-Backed Investor Sells Holdings to the Other Guys
ARA announced its agreement to sell its stake in Cache to Logos just over one month after its Warburg Pincus stablemate, logistics developer and fund manager ESR Cayman had spent S$37.3 million to expand its stake in Singapore-listed industrial trust AIMS APAC REIT (AA REIT).
ESR, which raised HK$12.6 billion ($1.6 billion) through its IPO on the Hong Kong stock exchange in late October, manages and owns a substantial stake in Singapore-listed ESR REIT, and has adopted an explicit strategy in recent years of buying up stakes in industrial real estate trusts listed in the city state.
Sources familiar with ESR’s operations, without commenting on the Cache Logistics Trust transction, indicated that the company continues to pursue its efforts to consolidate industrial real estate holdings in Singapore.