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An ESR Australia and GIC joint venture has acquired Blackstone's 'Milestone Portfolio' for $3.8 billion, making ESR the third-largest manager of industrial real estate in Australia.
The deal encompasses 45 high-quality, income-producing assets across Australia's capital cities, and brings ESR's assets under management to $7.9 billion.
The 'Milestone Portfolio' boasts a high quality customer base consisting of national, multi-national, ASX-listed or government clients including Woolworths (ASX: WOW), Lineage Logistics, Toll, Australia Post, Mazda and WesTrac.
To make the acquisition ESR partnered with GIC as its capital partner under a newly formed investment vehicle called EMP which will see ESR contribute 20 per cent of the equity.
ESR CEO Phil Pearce called the deal "transformational", providing the company with immediate scale.
"The opportunity to secure such a large portfolio with extremely well-located assets across Adelaide, Brisbane, Melbourne, Perth and Sydney, strategically positions EMP to benefit from the continued growth in demand for warehouse space, particularly as the robust demand for logistics real estate is expected to remain strong due to sustained growth in e-commerce sales," Pearce said.
"The portfolio is land rich, with low site coverage of only 38 per cent, providing plenty for scope for ESR Australia to redevelop these assets over time."
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