Mitsubishi Estate, ESR Teaming Up to Develop $490M Western Sydney Logistics Estate

Mitsubishi Estate Asia is expanding its bets on Australia’s logistics market through a joint venture with ESR to develop a $490 million project in Western Sydney.

The deal to develop the Huntingwood Logistics Estate is the second tie-up for the regional investment unit of one of Japan’s largest developers with ESR, giving the Singapore-based logistics specialist the opportunity to start building a 114,005 square metre (1.2 million square foot) complex on a site which has been in its portfolio since 2022.

With his team having also invested in Australian warehouses through a venture with Sydney-based Charter Hall, Yosuke Matsunaga, head of Australia for Mitsubishi Estate Asia, said in a joint statement with ESR that the Western Sydney partnership aligns with the company’s goal of deepening its exposure to the country’s logistics sector.

“Huntingwood offers everything we look for being scale, location, and a development partner with a proven track record,” Matsunaga said. “We look forward to delivering something exceptional here.” 

Build, Lease, Repeat

In a multi-stage project, Mitsubishi Estate and ESR will be working together to develop an 18.3 hectare site (45.2 acre) site on Augusta street in Huntingwood, according to the statement, leveraging infrastructure improvements which have reduced transit times both to central Sydney and to the gateway city’s airport.

“Huntingwood is a premium logistics site in one of Sydney’s most sought-after industrial precincts,” ESR president Phil Pearce said, “and we’re excited to deliver a best-in-class estate alongside a partner who shares our vision for world class developments in Australia’s key growth markets.”

In a description of the project on its website, ESR points to Huntingwood Logistics Estate being designed to achieve a 5-star rating under the Green Star regimen for sustainable buildings, incorporating rooftop solar, rainwater harvesting and other efficiency measures with the project targeted for completion in the third quarter of 2027. 

Mitsubishi Estate and ESR announced this latest joint venture two years after the Japanese company invested in an ESR project to develop a 70,000-square metre industrial estate in the Melbourne suburb of Pakenham as its first major Asian investment in logistics outside of its home market. 

Earlier this year ESR announced that the first two pieces of its Enterprise Industry Park joint venture with Mitsubishi Estate were fully occupied with Kumho Tyre Australia and Belgian fabric manufacturer Bekaert Deslee having committed to one building each on a long-term basis. 

The final two assets in Enterprise Industry Park are expected to be completed during this month, according to a post on LinkedIn, with the partners having estimated in 2024 that the total project value would reach A$175 million. 

Western Sydney Upgrades

ESR and Mitsubishi Estate are unveiling their partnership around six months after ESR bought out its original partners in the Huntingwood project, KKR and Mubadala in a deal reported by The Australian to be worth more than A$300 million. 

The US private equity giant and the Abu Dhabi sovereign wealth had backed acquisition of the logistics site by Logos in a deal announced in February 2022 – just weeks after ESR completed its $5.2 billion acquisition of the Sydney-based fund manager’s parent group, ARA Asset Management.

Since that site purchase four years ago, the Huntingwood site has benefited from construction of tunnels and other transit links which have improved connectivity to the area, including completion of the Rozelle Interchange in late 2023 as the final step in the WestConnex network which improves transit times both to the Port Botany container terminal and Sydney airport.  

The network is designed to cut transit times across the city by up to 40 minutes, with industry analysts indicating that the transit upgrades put the Huntingwood site within 15 minutes’ drive of the Sydney airport. 

Australia in Mind

Mitsubishi Estate is upping its commitments to Australian logistics after forming a joint venture with Australia’s Mirvac in September last year to develop a luxury Sydney residential project with an expected end value of over A$2 billion ($1.3 billion).

Aside from 260 apartments, the Harbourside project at Darling Harbour near the city centre will feature 35,000 square metres of premium office and retail space, 10,000 square metres of public open space and a 3,500 square metre waterfront park.

In February of this year the company sold its 20 percent interest in Sydney’s Salesforce Tower to Singapore-listed OUE REIT for A$357.2 million, after marketing its holding in the 56-storey office building since 2024.

During that same month CBRE began marketing Mitsubishi Estate’s 49.9 percent interest in the Stockland Residential Rental Partnership, a portfolio of six land lease communities comprising 2,025 homes in Southeast Queensland and Melbourne. 

Mitsubishi Estate has also been boosting its outbound logistics investments beyond Australia. 

In January the company expanded a partnership with Logicap Management, an industrial specialist backed by Singapore-based Rava Partners, to develop logistics facilities in India. In 2024, Mitsubishi Estate teamed up with Houston-based Hines and Mitsui unit MBK Real Estate Asia to acquire a four-storey logistics asset in Singapore.