South Korea’s National Pension Service has sold its 50 percent stake in an industrial property portfolio of 20 assets in Sydney and Melbourne to Australian pension fund UniSuper for more than A$500 million ($338 million).
The portfolio of Dexus-developed properties, known as the Australian Industrial Partnership, is a joint venture whose other half is owned by Dexus Australian Logistics Trust, a 51:49 JV of Sydney-based Dexus and US private equity giant Blackstone.
Of the 20 portfolio assets, 12 are located at Quarry Industrial Estate in Greater Western Sydney and eight are situated in the core industrial market of Truganina in Melbourne, UniSuper said Tuesday in a release. The 340,000 square metres (3.7 million square feet) of space is leased to tenants including supermarket chain Coles and international courier UPS.
“The investment adds to our $7.3 billion unlisted property portfolio,” said Nick Stephens, senior manager for property at UniSuper. “The transaction highlights UniSuper’s ability to transact swiftly without the need for debt funding or regulatory approvals.”
Pension Fund Seizes Moment
Cushman & Wakefield, which managed the acquisition sees the transaction as setting new market rates for industrial properties after completing a global marketing process for the portfolio stake.
“We are seeing capital being very strategic and heavily focussed on premium grade assets as opposed to taking on long dated risk,” said C&W international director and head of industrial and logistics for Australia and New Zealand Tony Iuliano, who brokered the deal together with national director Adrian Rowse. “This global process (of marketing the stake) identified multiple participants and has now set the benchmark to price discovery in the most sought-after asset class globally and in particular within Australia”.
Dexus set up the Australian Industrial Partnership with the Korean NPS in 2012 with an initial portfolio valued at A$360 million and comprising 13 industrial properties in Sydney and Melbourne, The Australian reported.
In late 2021, Manhattan-based Blackstone bought its 49 percent stake in Dexus Australian Logistics Trust from Singapore sovereign fund GIC for an amount close to $1.2 billion. The deal followed Blackstone’s $2.9 billion sale of the Milestone Logistics portfolio in Australia to a JV of GIC and Hong Kong-listed industrial specialist ESR the previous April.
Cushman & Wakefield’s Tony Iliuano and Adrian Rowse represented NPS in its half-stake disposal, while Richmond Bridge, a Sydney-based real estate investment manager, negotiated on behalf of UniSuper, which invests more than A$120 billion on behalf of 615,000 members.
“We are pleased to have successfully concluded this transaction, capitalising on a market with fewer buyers, which allowed us to secure these high-quality assets at an attractive entry price,” said Richmond Bridge director George Locke and chief investment officer Peter Wylie. “When presented with the opportunity to assess this portfolio for UniSuper, we did not hesitate, recognising the rarity of such offerings in the market.”
The month of June saw movement in Australia’s industrial market as ESR acquired a manufacturing plant in Sydney’s Botany Bay area on behalf of a joint venture with GIC, with the partners planning to invest at least A$443 million ($301 million) to develop a multi-storey logistics facility on the site.
The APAC shed specialist and the sovereign fund paid A$143 million to pick up the Allnex coatings factory in Banksmeadow from the German manufacturer, providing their ESR Australia Partnership II vehicle with a 48,000 square metre site. The deal allows for the facility to be leased back to the seller for the next five years.
Also last month, Hong Kong’s Phoenix Property Investors announced plans to develop a 30 hectare (74 acre) industrial and logistics park in Sydney with blue-chip local builder Lendlease.
The partners are jointly building a A$185 million ($126 million) industrial precinct along Links Road in the western Sydney suburb of St Marys, aiming to develop logistics facilities in line with market demand.