Mubadala has made its first entry into the Australian logistics real estate market with a joint venture with Logos and KKR.
Seeded with a A$200 million (US$155 million) project to create a master-planned logistics estate near Brisbane, the platform will acquire and develop facilities across the eastern seaboard markets. A target AUM for the partnership was not announced.
Interest in logistics real estate has accelerated with the onset of the Covid-19 pandemic, stimulated by consumption-oriented supply chains, urbanization, digitalization and demographic trends, particularly in Asia. Retail is being transformed by technology and the rise of the consumer class, supported by the growth of e-commerce and the expectation of faster turnaround times in delivery.
Logistics retail estate is central to the development of decentralized supply networks that are crucial to consumer market evolution – and state-owned investors are deploying billions of capital into the sector. Logos has become a popular co-investment partners for state-owned investors seeking exposure to Asia’s logistics real estate markets, particularly Canadian PPFs. Since the beginning of the pandemic, Logos has secured at least US$700 million in SOI capital for its Asian logistics real estate projects, building on past success.
Last year, the Australian property developer signed up CDPQ’s Ivanhoé Cambridge for a A$230 million industrial hub in Melbourne; Ivanhoé acquired a major stake in Logos in 2016, investing A$300 million. CPP Investments joined a US$1 billion Indonesian logistics joint venture earlier this year, having previously invested a total of US$243 million in two smaller ventures in Indonesia and Singapore in 2017. New South Wales’ Treasury Corporation (TCorp) and Logos forged a US$134 million JV for two distribution centres offered by pharmaceutical giant Sigma with a leaseback last year.
GIC has also chosen Logos to help advance its exposure to the logistics market with a JV in Vietnam, the US$70 million Logos Bac Ninh Logistics Estate, and a US$180 million infill development site in Auckland, New Zealand.
The story is only beginning with SOIs rapidly advancing their exposure to the logistics market and we expect Logos to develop its relationship with Mubadala, as it has done with its Canadian PPF partners.