This article is from the Australian Property Journal archive
PAN-Asian logistics property group ESR has bought out developer CIP from Charter Hall and its partners, which it will use as a seed asset to establish its own platform in the Australian market.
Singapore-based ESR, backed by international private equity firm Warburg Pincus, stormed onto the Australian scene last year by upturning Centuria’s takeover attempt of industrial specialist Propertylink, acquiring a competing 18.06% stake in Propertylink before it raided Centuria’s register and took a 14.9% stake.
The $102.5 million deal will see ESR take Charter Hall’s 50% share in CIP, and give it a launching pad for a more formal presence in the industrial market.
ESR’s assets under management currently total more than US$12 billion.
Demand is growing for industrial and logistics property across Australia, propelled by the introduction of e-commerce giants such as Amazon and the flow-on effect on retail supply and delivery chains.
Charter Hall, through its wholesale Charter Hall Prime Industrial Fund, paid $55.35 million in April for a 58-hectare site in Melbourne’s western industrial hub of Truganina, on which it will look to develop a $330 million logistics estate. The property is next to its Drystone Industrial Estate.
The sale of its interest in CIP will deliver a $9.5 million premium to Charter Hall’s carrying book value.
Managing director and group chief executive officer, David Harrison said Charter Hall now has a fully integrated internal development capability, which led to the decision of all shareholders to realise their investment in CIP.
They included founding members of its senior team including Paul McKenna and Therese Lynch.
“Since the acquisition of a 50% shareholding in 2007, the partnership has been a successful strategy for both Charter Hall and CIP delivering an approximately 10% per annum average cash franked dividend to shareholders,” McKenna said.
“The partnership has also contributed over $1 billion of pre-leased investments contributing to our now$6 billion of industrial and logistics investment assets, together with a further $1.5 billion development pipeline.
“The partnership has delivered high quality pre-leased industrial investments to major tenant customers such as Australia Post, VW, Ceva, AHG, Coles, Target, Reject Shop, Couriers Please and many others, with a total of 30 pre-leased industrial investments secured.”
The transaction has checked off by the Foreign Investment Review Board and is expected to settle this month. Charter Hall and the foundation investors of CIP were advised by UBS AG, Australia Branch and King & Wood Mallesons.
Australian Property Journal
