Dexus & GIC Establish $2B Logistics Trust
Dexus announced this week the establishment of a new circa $2 billion unlisted trust that will invest in Australian logistics properties.
The new unlisted vehicle, to be known as the Dexus Australian Logistics Trust is an open-ended trust with an active acquisition and development mandate. The Joint Venture will be seeded with assets from Dexus’s existing industrial portfolio comprising $1.4 billion of core logistics properties and a $138 million development landbank (circa $0.5 billion on completion).
GIC will be DALT’s foundation investor taking an initial 25% investment in the core portfolio, with put and call rights to acquire an additional 24% by June 2020. GIC will take a 49% interest in the development landbank and fund its share of development spend. Other investors may be added to the Joint Venture in the future, potentially reducing Dexus’s ownership stake over time.
The Joint Venture’s core portfolio will have a weighted average lease expiry of 5.3 years and average occupancy by income of 98%. The portfolio features a 97% exposure to the strong performing Sydney and Melbourne markets and is weighted to traditional logistics facilities, which are leveraged to the growth of e-commerce.
The initial development landbank comprises interests in the three land development;
• 50% interest of 11-167 Palm Springs Road, Ravenhall, VIC (first tranche expected to settle in December 2018)
• 100% interest of 54 Ferndell Street, South Granville, NSW (settled November 2018)
• 100% interest of 425 Freeman Road, Richlands, QLD (expected to settle in December 2018)
These development projects are expected to deliver product for the Joint Venture with a total future completion value of circa $0.5 billion.