Singapore’s GIC has backed ESR Australia’s newly launched logistics fund with a A$450m (€248.6m) capital commitment, according to people familiar with the matter.
Phil Pearce, ESR Australia’s CEO, declined to confirm the ESR Australia Logistics Partnership (EALP) fund’s cornerstone investor but said the vehicle had a A$1bn fundraising target.
Pearce said the EALP vehicle had a target raise of A$1bn. “ESR will co-invest and take up between 10%-20% of the equity and we will raise the balance from other investors.
“We are in discussions other institutional investors and given the type of investors that we are talking to, we are confident that they will see through the present (Covid-19) crisis to the long term,” said Pearce.
He said customers who serviced the retail and entertainment sectors were feeling the pressure but, on the whole, they were holding up well.
“We are getting anecdotal evidence that some companies realised that inventories, especially in food and pharmaceutical products, were too tight and unable to meet the pick up in demand.”
Pearce said companies had indicated intentions to increase their inventories and this would, in turn, require additional warehouse space.
While brick and mortar retailing had been impacted by lockdowns, e-commerce was a beneficiary with the speeding up of the take up of online retailing, he said, adding that Australia was slower to take up online retailing compared to Asia, the UK or the US.
The new partnership is seeded with a portfolio, valued at A$715.6m, and includes 20 income-producing assets and 19.4ha of land.
This initial portfolio comprises assets attained as part of the Propertylink acquisition, recently completed developments, and land acquired by ESR Australia over the past 18 months.
Pearce said the launch of EALP allowed ESR Australia to capitalise on diminishing land supply and strong tenant demand, developing premium logistics and industrial facilities.
“We have significant further capital reserves to accelerate our growth and continue as a serious contender for strategic development sites and established assets.“