GIC Said Backing NZ$250M Warehouse JV with Logos

Logos and GIC plan to add another 36,000 sqm of space to Toll Group’s NZ facility

Logos Group has formed a joint venture with a global institutional investor which Mingtiandi now understands to be Singaporean sovereign wealth fund GIC, as the Aussie warehouse developer extends its reach in New Zealand.

Logos announced yesterday that its new JV had acquired a 17.2 hectare (42.5 acre) logistics site near Auckland from Australian transport company Toll Group for an undisclosed sum, and now plans to develop a NZ$250 million ($150 million) project on the plot.

The acquisition, which is expected to complete by the end of 2020, includes an agreement to lease back to Toll a newly developed 36,080 square metre (388,362 square foot) freight forwarding facility currently occupied by the transport company on the site.

Toll will continue to occupy the existing facility for 15 years under the leaseback deal, while Logos and its partner will develop a new logistics hub on the remainder of the 9.6 hectare plot. The new facility has already been christened Logos Otohuhu Logistics Estate, including Toll’s distribution centre, will provide 66,000 square metres of net leasable area.

The announcement comes just over a year after Logos struck a similar leaseback deal with Toll to acquire a development site in Sydney with that project predicted to have a value on completion of A$200 million ($124 million).

Setting Up More Sheds in New Zealand

With Toll continuing to occupy over half of the project, the Logos-GIC joint venture has already started talking to prospective tenants for the planned expansion, and Mingtiandi has come to understand that the partners expect e-commerce firms to take up much of the space, although leasing will not be restricted to that sector.

Logos’ Darren Searle has confidence in New Zealand’s logistics sector

While only this initial project has been agreed to at this point, the Logos-GIC partnership has aspirations of evolving into a New Zealand-specific warehouse development platform that would build multiple facilities.

GIC’s participation in the deal was first reported by IPE Real Assets, and neither GIC nor Logos would comment on the $360 billion wealth fund’s involvement when contacted by Mingtiandi.

Committing to New Zealand’s Logistics Sector

“Logos first entered New Zealand in 2018 and we’re committed to working with our partners and the local industry to further strengthen the logistics and distribution offering in this market through the development of modern, quality logistics and intermodal facilities,” said Logos’ head of Australia and New Zealand, Darren Searle.

Located at 259 James Fletcher Drive in Otahuhu on New Zealand’s North Island, the development site is in an industrial area 16 kilometres south of Auckland with direct access to the region’s main rail lines, as well as having six motorway entry points within 5 kilometres of the project.

Toll has agreed to rent the newly developed facility at an initial rate of NZ$6.4 million per annum, with the 15 year deal including fixed rental growth of 2.5 percent and two further rights of renewal of ten years each, according to CBRE, which marketed the site.

A dedicated rail line has been built to connect the facility, while Auckland International Airport is eight kilometres to the southwest, and the Port of Auckland is 17 kilometres north.

“Otahuhu is well-known as the historical engine room of New Zealand’s industrial economy, and the James Fletcher Drive precinct is at its heart,” said CBRE’s Brent McGregor, with the property consultancy saying in a statement that the site is located in the “Golden Triangle of Auckland, Hamilton, Tauranga”, which contains 50 percent of the country’s population.

GIC Expands Down Under

The reported investment by GIC is the latest in a wave of logistics investments by the sovereign wealth fund in 2020, as it ramps up its warehouse portfolio down under.

Just two weeks ago, GIC was reported to have made an initial commitment of A$450 million ($280 million) to a A$1 billion joint venture with ESR to develop logistics and industrial facilities in Australia.

That deal with the Hong Kong-listed developer and fund manager came a little more than two months after GIC paid A$366 million to supplement its existing holdings in Dexus Australian Logistics Trust (DALT) with an additional 24 percent stake in the private trust. The sovereign wealth fund had acquired its initial quarter-stake in the A$2 billion DALT in November 2018.