ESR has received a A$350m (€217.5m) mandate from the real estate arm of Chinese institutional investor, China Merchants Capital Investment, to acquire logistics property in Australia.
The new mandate from China Merchants Frontier Capital, to be known as ESR Australia Logistics Trust (EALT) – will be seeded with A$175m of assets currently held by ESR.
It is anticipated that the trust will grow to A$350m over the next 12 months.
Phil Pearce, CEO of ESR Australia, said: “The establishment of this mandate is the first step in a strategy of releasing capital from our balance sheet to fund and accelerate our future developments”
Pearce said the company had a robust development pipeline in Australia and it was pursuing a number of other opportunities.
Vincent Yu, managing director and CEO of China Merchants Frontier Capital, said as last-mile delivery became increasingly important for supply chain efficiency, occupier demand for industrial and logistics properties would continue to grow.
Jeffrey Shen and Stuart Gibson, co-founders and group co-CEOs of ESR, added: “The establishment of EALT demonstrates the strength of our integrated business model using a capital-efficient strategy to source and recycle capital.
“It also reflects our confidence in the long-term potential of the Australian logistics and industrial real estate sector,” they said.