KKR, M&G Invest in $509M Aussie Warehouse Portfolio as PGIM JV Buys Queensland Sheds

Fund managers KKR and M&G Real Estate have set up separate partnerships with Australian builder Stockland to invest in a warehouse portfolio valued at over A$800 million ($509 million), as industrial assets continue to lead transactions Down Under.

Manhattan-based KKR holds a 70 percent stake in the core-plus Stockland Logistics Partnership Trust, an open-ended vehicle seeded with three Sydney properties at an initial gross asset value of A$388 million for the portfolio, the companies said Wednesday. Stockland owns the remaining 30 percent interest in the partnership.

M&G Real Estate, a unit of London-listed investment manager M&G, teamed with Stockland on the Stockland M&G Asia Property Trust, a 50:50 open-ended partnership seeded with a logistics park in New South Wales at an initial gross asset value of A$415 million for the portfolio.

CBRE’s Stuart McCann, Paul Ryan and Chris O’Brien advised Sydney-based Stockland on both partnerships, which mark the latest Aussie shed bets by global investors seeking higher yields from established assets.

“These partnerships highlight the increased levels of core and core-plus capital returning to markets in Australia, as capitalisation rates have stabilised and strong rental growth dynamics continue to drive attractive returns,” said McCann, who is CBRE’s head of international capital and capital advisors for the Pacific and Southeast Asia.

Stockland Rush

No details were provided for the assets of KKR’s Stockland Logistics Partnership Trust. The Stockland M&G Asia Property Trust’s seed asset is Ingleburn Logistics Park, a warehouse campus in Sydney’s southwest suburbs with 123,551 square metres (1.3 million square feet) of gross lettable area.

Wednesday also saw PGIM Real Estate announce its own acquisition of a Stockland property, with the US fund manager picking up a 50 percent stake in a Queensland industrial estate for A$207.5 million ($135.2 million) under a joint venture with KM Property Funds.

The complex at 14 Dixon Street in Gold Coast’s Yatala suburb comprises four warehouses with a gross lettable area of 43,572 square metres. The off-market deal was advised by Nick Evans and Gavin Bishop of Colliers and Jack Kelliher and Ben Hegerty of JLL.

“The partnership with KM Property Funds on this acquisition aligns with our thesis of targeting high-quality assets with rental reversion potential that will be attractive to core capital investors in the future,” said Steve Bulloch, head of Australia at PGIM Real Estate, a division of insurance giant Prudential Financial.

The transaction is PGIM’s second industrial deal alongside the real estate investment division of Melbourne-based advisory firm KordaMentha within a nine-month period, following the partners’ acquisition of an industrial estate in Melbourne’s Laverton North precinct last May. PGIM also purchased a last-mile logistics site southeast of Melbourne last year in a joint venture with ASX-listed Elanor Investors Group.

Industrial Strength

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.

Industrial volume narrowly outpaced office deals, which saw trade jump 29 percent to A$9.5 billion, the data provider said. The industrial figure led the table despite the stripping out of A$13 billion in data centre deals — also considered industrial — into a sub-category.

Overall transaction volume in Australia’s income-generating real estate sector shot up 46 percent last year to A$44.3 billion as investment levels moved back in line with the decade-long average. The sharp rebound signalled the return of investors after a cautious 2023, said Ben Martin-Henry, head of Pacific private assets research at MSCI.

“Despite ongoing macroeconomic challenges, the stability of interest rates and improved market conditions have fueled this momentum, particularly in sectors like industrial and retail,” Martin-Henry said.

(Note: This story has been updated with the details of PGIM Real Estate’s acquisition.)