Ivanhoé Cambridge and Macquarie’s investment in Australia’s Logos Property Group could boost the company’s portfolio to as much as AUD5bn (€3.4bn).
John Marsh, Logos joint managing director, told IPE Real Estate the company’s two new partners were setting their sights on creating a logistics portfolio valued at up to AUD5bn in the medium term.
“Ivanhoé Cambridge is now part of our management team and will be involved with the growth strategy of Logos,” he said.
“Moving forward, our plan is to create a strategic alliance and management platform to expand across Asia Pacific.
“Two to three years from now, we could have a very big portfolio of AUD4bn-5bn.”
Ivanhoé Cambridge, a subsidiary of the Caisse de dépôt et placement du Québec, and Macquarie Capital agreed to become strategic partners in Logos last month.
The transaction gives the new partners access to a portfolio of some AUD2bn of assets in Australia and China.
Marsh said the company had a “significant pipeline” of opportunities in China, approaching 3m sqm and with an end value of approximately $1.5bn.
He said most of the sites had already been secured, while others have been targeted.
The expansion programme will meet strong demand for logistics facilities to cater for exponential growth of e-commerce in China.
“I live in China,” Marsh said, “and can see the undersupply in some areas in major tier-one cities.
“There are not enough facilities for a country with the size of population and economy of China.”
Ivanhoe Cambridge previously participated in a logistics club venture in China with Logos, alongside CBRE Global Investors.
The trio invested $400m in the venture, set up in July last year.
The three partners recently bought the Oxford Cold Storage asset in Melbourne in a deal worth about AUD210m.
Rita-Rose Gagne, executive vice-president of growth markets at Ivanhoé Cambridge, said: “We intend to make further investments in future Logos-managed ventures across the Asia Pacific region, alongside trusted institutional partners.
“We will continue to support the growth of the platform as a leading Asia Pacific logistics real estate company.”
Brett Robson, Macquarie Capital’s global head of real estate private capital markets, said Ivanhoe Cambridge’s endorsement of the Logos platform was an important milestone for the company.
In addition to being its advisor, Macquarie Capital has had a strategic stake in the logistics group since 2014.
Over the past five years, Logos has raised more than AUD1.3bn in equity commitments from sovereign funds and global pension funds.
Just over a year ago, Logos formed a venture with the Abu Dhabi sovereign fund, ADIA, to develop logistics assets in Australia – in New South Wales, Queensland and Western Australia.
“ADIA is looking at establishing a significant presence in Australia,” Marsh said.
“We are progressing with the acquisition of key land banks in major industrial precincts in Australia.”
ADIA has a develop-and-hold core strategy for Australia.
Malaysian pension fund KWAP (Kumpulan Wang Persaraan) enlisted Logos to purchase four assets in NSW and Queensland for around AUD220m in late 2014.
Logos was founded in 2010 to assist Singapore’s sovereign wealth fund, GIC Pte, in its purchase of a portfolio from a Melbourne company known as Salta Properties for around AUD220m.
Subsequently, Logos worked with GIC to grow that portfolio.
GIC sold the portfolio, including other assets, to another Singapore group, Ascendas, for around AUD1.1bn, setting a new record for yield on an industrial portfolio.
“We continue to have a great relationship with GIC, and perhaps they might come in with us again if we can identify something of interest” Marsh added.