As for capital raising, Chui says it will be part of a transaction where ESR-REIT acquires a portfolio, most likely from ESR Cayman. “We believe size does matter, and acquisitions are part of our three year business plans. In the later part of 2021, we will start to move overseas. With ESR Cayman’s platform, our acquisitions will focus on overseas markets were ESR Cayman has established operations,” Chui says.
It will also mean that ESR-REIT’s acquisition pipeline consists mainly of logistics properties, including cold storage facilities owned and operated by ESR Cayman. As at June 30, 2020, ESR Cayman’s assets under management stood at US$26.5 billion spread across six countries. Its Australian AUM was US$2 billion. On Nov 18, ESR Australia Logistics Partnership (EALP) acquired a portfolio of 11 logistics assets for A$302 million, taking EALP’s fund size to A$1 billion.
In October, ESR Australia Developmenet Partnership (EADP) acquired an 18 ha site with the potential to yield 100,000 sq m of gross floor area.
“Our acquisitions will focus on overseas markets where ESR Cayman has established operations. Overseas properties from third parties would be in countries were ESR Cayman has a presence,” Chui adds. He says that 30% to 40% of ESR Cayman’s AUM could be potential acquisition targets for ESR-REIT. The targets could be a mixture of income producing properties and development properties, he adds.
At present, following the failed merger with Sabana Shariah Compliant Industrial REIT, a A$1 billion portfolio from EALP, or a mixture of income producing and development properties with their freehold land tenure from EALP and EADP may look a lot more appealing than Sabana REIT’s properties.
