ESR REIT has proposed a S$1.4bn (€895m) merger with ARA Logos Logistics Trust (ALOG) to create one of the largest vehicles on the Singapore stock exchange – with combined assets under management of S$5.4bn.
The merged vehicle, to be known as ESR-Logos REIT (E-LOG), will have a S$2.5bn market capitalisation and own a portfolio of 87 assets, mostly in Australia and Singapore, as well as 41 other properties held through investment funds in Australia.
ESR is proposing to offer S$0.95 in cash and new units in the new vehicle for each ALOG security.
Adrian Chui, CEO and executive director of the ESR-REIT Manager, said the proposed merger was in line with ESR-REIT’s strategy to accelerate its growth and to tap into the rapid expansion of e-commerce in Asia-Pacific.
Karen Lee, CEO of the ALOG Manager, said the merger “enhances our financial capacity and our flexibility to pursue larger and more sizeable growth opportunities”.
Both Chui and Lee spoke of access to the low cost of debt and a wider pool of third-party capital as key benefits of the enlarged entity.
Chui said the merged vehicle would have access to the property and development pipeline of the ESR group, valued at more than US$50bn and US$10bn (€44bn and €8.6bn) respectively to “supercharge” growth to become the leading platform in Asia-Pacific.
The merger, which is subject to approvals, is also conditional on the successful completion of ESR’s $5.2bn take over of ARA Asset Management.
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