This article is from the Australian Property Journal archive
SHAREHOLDERS of logistics giant ESR have approved its acquisition of ARA Asset Management, creating the world’s third-largest listed real estate investment manager and the largest in the Asia Pacific, with US$131 billion of assets under management.
The US$5.2 billion deal was approved at the extraordinary general meeting with 91.81% of the vote.
Upon completion of the transaction, later this year or early next year, ARA’s business will be combined with ESR’s platform to form the enlarged ESR Group.
“We are currently experiencing a once-in-a-generation change in real estate and the enlarged ESR Group is very well positioned to capture the largest secular trends including the continued rise of e-commerce, an accelerating digital transformation and the financialisation of real estate,” ESR chairman Jeffrey Perlman said.
ESR has become a major player in Australia’s industrial real estate landscape in recent times, and earlier this year partnered with Singaporean sovereign wealth fund GIC to secure Blackstone’s Milestone logistics portfolio for $3.8 billion in Australia’s largest-ever property deal.
ARA is the largest real estate manager in the Asia Pacific with US$95 billion and recently won the protracted and bruising battle for control of ASX-listed Cromwell Property Group.
The key plank of the agreement is ARA’s controlling stake in Logos – itself having headed a consortium mid-year that bought the country’s largest intermodal freight facility for $1.7 billion, and more recently the $802 million purchase of land and facilities from Qantas – and which serves as its logistics and data centre specialist and fulfills ESR’s “new economy” ambitions.
ESR Group will be “powered by the leading new economy real estate platform with over US$50 billion of assets under management and which represents approximately 80% of the enlarged Group’s EBITDA,” ESR said.
Jeffrey Shen and Stuart Gibson, ESR co-founders and co-CEOs, said, “We are grateful to our shareholders for their unwavering trust and support in ESR. In joining forces with ARA (and by extension Logos), we will leverage the expertise, best practices and capital market relationships across the combined platform to grow the enlarged ESR to new heights.”
ESR announced in October the proposed merger of ESR-REIT and ARA LOGOS Logistics Trust to form ESR-LOGOS REIT, a “flagship future-ready new economy APAC S-REIT” with total assets of US$4 billion.
