Frasers Merger Plan Sets Up S$5.4B Logistics and Industrial Platform

Frasers Property is merging its Australian and European industrial and logistics businesses, along with the asset and property management of its Singapore-listed industrial REIT, into a single platform with S$5.4 billion ($4 billion) in assets, the company revealed this week.

The Singapore-based property group expects to run the businesses as a group with unified reporting and management in the 2020 fiscal year, according to a company statement to the Singapore stock exchange.

To manage the newly unified set of companies, Frasers, which is headed by chairman Charoen Sirivadhanabhakdi, has promoted a pair of executives from Frasers Property Australia, with Reini Otter set to serve as CEO of the new group while Matt Knox has been appointed as chief financial officer.

Frasers Unifies Growing Business

“Our industrial and logistics business in Australia and Europe has grown rapidly over the past five years, from S$1.6 billion to S$5.4 billion,” said Panote Sirivadhanabhakdi, Frasers’ chief executive officer and son of the group chairman. “We are building upon our multi-national industrial and logistics capabilities to better support the group’s growing investment in this asset class for the long-term, in a focused and integrated fashion.”

The merger combines a series of industrial real estate acquisitions in Europe and Australia with the management businesses serving the company’s existing Singapore-listed REIT, Frasers Logistics & Industrial Trust (“FLT”).

The merger plan means that the new unit will take over the asset and property management of Frasers Logistics and Industrial Trust’s portfolio, which now includes almost 2.3 million square metres (24.8 million square feet) of assets in Australia, Germany and the Netherlands.

The company reshuffled the Euroean element of that portfolio just last week when the manager of FLT said it was acquiring 12 freehold logistics properties in Germany and Australia from Frasers Property at a value of A$644.7 million ($451 million).

Frasers Veterans to Run Unified Business

Panote said in the statement that the group expects to be able to better serve its customers and expand more quickly.

To achieve that expansion the Thai billionaire is counting on Otter and Knox to put decades of experience with Frasers to work on the unified industrial business.

Otter steps up from a four-year stint overseeing industrial development and investment property operations in Australia as executive general manager of Frasers Property Australia, after being involved in the group’s Australian operations since 1998.

Knox, who previously served as chief financial officer for the group’s Australian arm, has worked in Frasers’ operations down under since 2007 when the business was listed on the Australian Securities Exchange as Australand Property Group. He was also chief financial officer when Frasers Property acquired Australand Property Group in 2014 for A$2.6 billion ($1.8 billion).

Following the formation of the new platform, the manager of Frasers Logistics and Industrial Trust will remain under the leadership of Robert Wallace as chief executive officer.

Over $3 Billion Spent on Sheds in 5 Years

Frasers’ consolidation of its Australian and European portfolios comes after the group has spent over $3 billion, including its 2014 acquisition of Australand, building up a logistics and industrial portfolio in Australia and Europe over the past half a decade.

This five-year investment program includes the purchase of a portfolio of 22 industrial properties in Germany and Austria when Frasers acquired German logistics developer Alpha Industrial for €285.2 million ($320 million) seventeen months ago.

Three months prior to that, the Singapore firm purchased a pair of warehouse facilities in Germany for €42.4 million($48 million).

That shed deal came soon after Frasers acquired a set of four business parks totalling 4.9 million square feet in built area in the UK for £686 million ($857 million) in September 2017.