Hines Makes First Aussie Shed Investment as Fund Acquires Four Assets for $156M

Hines has acquired its first logistics properties in Australia, adding a fifth country to the US developer’s growing portfolio of Asia Pacific industrial assets.

The firm’s flagship commingled APAC core-plus fund, Hines Asia Property Partners (HAPP), purchased a portfolio of three properties in Sydney and a fourth in Brisbane from Australian investment manager Pipeclay Lawson, Hines said Wednesday in a release. Local news reports put the consideration at A$210 million ($156.4 million) for the entire portfolio, representing a net passing yield of 3.4 percent.

Alysia Reilly, head of industrial and logistics for Australia at Hines, said that the four assets — which together span more than 58,000 square metres (624,307 square feet) — would provide the Houston-based company with immediate scale and a solid foundation on which to grow its industrial and logistics platform in the country.

“Our acquisition strategy is location-driven so the fact that this portfolio was heavily weighted to Sydney was a key driver,” Reilly said. “We are actively targeting locations that fit Hines’s last-mile/urban logistics criteria and assets that we can transition into next-generation urban infill distribution centres over time.”

Tenants of Steel

The newly acquired Pipeclay portfolio, which was marketed by JLL, consists of three warehouse facilities within large land sites in western Sydney — 13 Ferndell Street in South Granville, 128 Russell Street in Emu Plains and 68 Anzac Street in Chullora — and a fourth shed at 55 Brownlee Street in the Brisbane suburb of Pinkenba.

The facilities at Ferndell Street and Russell Street offer a respective 15,302 and 19,776 square metres of gross lettable area and are both anchored by leases with subsidiaries of ASX-listed building materials provider BlueScope Steel.

The Anzac Street property features 17,827 square metres of GLA and direct access to the intercity Hume Highway. The warehouse is accessed by nine on-grade doors and three docks, and the surrounding occupiers include Volkswagen, Australia Post and Fantastic Furniture.

The Brownlee Street warehouse provides 5,597 square metres of GLA and is situated in the TradeCoast development area adjoining Brisbane’s international airport.

Logistics is a key sector of interest for HAPP, which aims to build a diversified portfolio targeting core-plus returns and balancing yield and growth. Cadillac Fairview, the real estate investment arm of the Ontario Teachers’ Pension Plan, is the cornerstone investor in the fund, which has an initial investment capacity of about $900 million.

Shed Extension

Long known for its skyscraper developments like One Museum Place in Shanghai, Hines has been amassing a collection of warehouse projects and industrial sites around Asia Pacific since late 2020.

In November of that year, Hines and fund manager Metropolitan announced their acquisition of a 33,800 square metre cold storage facility and adjacent development site in Guangdong province as the builder’s first logistics investment in China.

Since then, the US firm has picked up two cold chain warehouses in South Korea, a light industrial asset in Singapore (alongside Germany’s DWS Group) and a two-building logistics project in Japan’s port city of Nagoya.

“The logistics market is experiencing robust growth globally and Hines is bringing high-quality product that caters to the future requirements of the sector and improves today’s logistics operator’s experiences,” said HAPP fund manager Simon Shen. “HAPP will target increasing opportunities similar to this Australia acquisition and build significant exposure to logistics through our portfolio deals in Asia Pacific.”

Hines oversees investment assets under management valued at $90.3 billion. The privately owned firm has developed, redeveloped or acquired 1,530 properties totalling over 47.4 million square metres.