Newly launched ESR Australia platform buys property group CIP

ESR has launched an Australian platform, ESR Australia, seeding it with a local property development company.

The Asian logistics group, which has expanded in Australia previously through strategic stakes in listed companies, has acquired Commercial and Industrial Property (CIP) from Charter Hall and founding members of CIP for AUD102.5m (€65m).

Philip Pearce, an existing director of the Singapore-listed ESR REIT, will head ESR Australia as its chief executive officer.

Pearce told IPE Real Assets that it is a natural progression for an Asia Pacific player to have a presence in Australia.

“We have been looking at the best way to enter the Australian market. Then the opportunity came along to acquire the CIP business. It seems a good fit.

“We are a development-led business, so it will take a long time to start up a development platform in Australia from scratch.”

The Warburg-Pincus backed ESR will bring capital from its own balance sheet and third parties to grow CIP’s land bank and grow its development pipeline.

Pearce said CIP currently has AUD150m worth of pre-committed development either under negotiation or documentation.

CIP co-founder and industry pioneer, Paul McKenna, will join ESR Australia to lead its development business.

ESR has stakes in Propertylink Group and Centuria Capital Group, but its attempts to take control of either company have been thwarted.

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