GIC has again backed ESR Australia in the launch of its third iteration of the ESR Australia Logistics Partnership (EALP) series, which has raised A$600m (€407m).

Similar to EALP I and EALP II, the latest fund will focus on developing industrial logistics assets along the Eastern Seaboard, primarily in NSW and Victoria.

Philip Pearce, ESR Australia CEO told IPE Real Assets that a number of assets had been identified and were under due diligence for the new fund.

The first two funds will have assets totalling more than A$3bn when their development projects are fully built out, said Pearce.

EALP III is likely to have assets under management on completion of around A$1.4bn when fully built out.

ESR will have a cornerstone investment of around 10% in the latest fund. The funds are open-ended, but they have a liquidity window in the seventh year.

Commenting on the industrial real estate sector’s outlook, Pearce said: “It is better than some other asset classes. Obviously, it depends on how hard the Reserve Bank goes [on interest rate hikes].

“Land is constrained in the major markets, and demand has remained strong. In the last few months, rents have been growing at mid-20s%. “We have never seen a market like this before.

“We build our warehouses on spec and they are full on completion. The vacancy in Sydney is 0.3%”

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