Brookfield Flips Sydney Logistics Complex to Ontario Teachers’, KIC, Gateway for $210M

Just three months after opening a Sydney logistics estate, Canadian giant Brookfield is selling the 12-building campus to a fund backed by the Ontario Teachers’ Pension Plan and Korea Investment Corporation for A$330 million ($210 million).

Brookfield sold Connect Central to the vehicle managed by Australian logistics specialist Gateway Capital after leasing up the 69,000 square metre (742,710 square foot) complex to 75 percent occupancy, the company said Thursday in a release. Following the sale of the complex in the western Sydney suburb of Villawood, the Toronto-based asset manager plans to keep adding projects in Australia’s red-hot industrial sector.

“Logistics continues to be a cornerstone of our Australian real estate portfolio and we remain focused on doubling the size of our exposure during the next 12 months,” said Ruban Kaneshamoorthy, Brookfield’s co-head of Australia real estate. “We have a strong pipeline of opportunities that we are currently exploring.”

Market sources who spoke to Mingtiandi were able to confirm the particulars of the Connect Central deal, including the sale price and the involvement of Korean sovereign fund KIC, after the details were first reported by Australia’s Financial Review. CBRE is understood to have advised on the transaction, a fresh milestone that follows Wednesday’s news of the latest Aussie warehouse investments by fund managers KKR, M&G and PGIM.

Foreign Capital Surge

Connect Central’s 12.6 hectare (31.1 acre) campus at 2 Christina Road hosts a dozen newly completed buildings with lettable area ranging from 2,000 to 18,000 square metres. Tenants include Hong Kong-based Kerry Logistics, health food vendor Honest to Goodness and textile supplier Ricky Richards.

The transaction remains subject to regulatory approval and is expected to close in the first quarter. It reunites Ontario Teachers’ with Sydney-based Gateway after the partners acquired a warehouse in Sydney’s western Chullora suburb in September, boosting their GULP core-plus partnership to A$520 million in assets across Australia’s eastern seaboard.

Brookfield manages a global industrial portfolio valued at $26 billion and has been acquiring Australian logistics assets — including an under-construction mega complex of 32 sheds in Pakenham, east of Melbourne — as the company looks to take advantage of e-commerce growth and rising rents.

“There continues to be strong underlying demand from investors for high-quality logistics assets in eastern seaboard locations that are close to major infrastructure and road networks,” Kaneshamoorthy said.

The sector’s robust fundamentals have supported an influx of foreign capital, particularly from Asia and the US, according to Tony Iuliano, international director and head of logistics and industrial for Australia and New Zealand at Cushman & Wakefield.

Momentum continues to build after Australian logistics assets underwent repricing during the past two years, with the market now at an inflection point as rates move lower, Iuliano said.

“Flight to quality will be a key feature of the market in 2025, and assets in key locations will be highly sought after, particularly existing facilities which are priced below replacement cost,” he told Mingtiandi.

Two Years and Counting

For the second straight year, industrial assets recorded Australia’s highest transaction volume among all property segments in 2024 with A$9.7 billion, an 11 percent rise, according to MSCI’s latest Capital Trends report.

The good vibes have persisted into 2025, with deal advisor CBRE announcing Wednesday that KKR and M&G Real Estate had set up separate partnerships with Australian builder Stockland to invest in a warehouse portfolio valued at over A$800 million ($509 million).

Wednesday also saw PGIM Real Estate reveal its own acquisition of a Stockland property, with the unit of Prudential Financial picking up a 50 percent stake in a Queensland industrial estate for A$207.5 million ($135.2 million) under a joint venture with Melbourne-based KM Property Funds.