MARKETS & INVESTING | Staff Reporter, Hong Kong

ESR snaps up Blackstone's $3.91b Milestone Portfolio

The portfolio contains 45 industrial real estate assets in Australia.

ESR Australia and ESR Milestone Partnership (EMP), subsidiaries of ESR Cayman Limited announced that it has entered into an agreement with Blackstone to acquire Milestone Portfolio and its manager for a total consideration of $3.91b (A$3.8b), subject to merger clearance approval in relevant jurisdictions.

The deal encompasses 45 assets across Australia’s major capital cities. With a land area of 3.6 million sqm and gross leasable area (GLA) of 1.4 million sqm the site cover is a modest 38% and provides significant scope for further development. The transaction is said to see ESR emerge as the third-largest logistics landlord in Australia with AUM increasing to $8.13b (A$7.9b).

ESR Australia partnered with GIC for the acquisition under a newly formed investment vehicle, EMP, which will see ESR contribute 20% of the equity.

The Portfolio boasts a very high quality customer base consisting of national, multi-national, Australia Securities Exchange listed or government clients such as Woolworths, Lineage Logistics, Toll (Japan Post), Daimler Benz, Australia Post, Mazda and WesTrac. The consideration attributed to the Portfolio is expected to provide an initial yield of 4.5% with a 6.9-year Weighted Average Lease Expiry.

The sale process commenced in January 2021 and was highly competitive with more than ten first-round bids received, subsequently reduced to five parties.

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