Industrial developer Logos is shopping a stake in its A$3 billion ($2 billion) Australian portfolio in what could be the biggest logistics property deal Down Under in two years.

The move by Sydney-based Logos is said to be giving the Abu Dhabi Investment Authority an opportunity to cash out of a portion of the sovereign wealth fund’s investment in the 10-asset portfolio.

A representative from Cushman & Wakefield confirmed to Mingtiandi on Monday that Logos had tapped the real estate consultancy to market the stake, with news of the potential sale having first been reported by the Australian Business Review.

The proposed disposal, which analysts see potentially setting a new standard for the value of logistics properties in Australia, gives investors a chance at owning a stake in a prime logistics development near Sydney airport along with other industrial assets.

Nine-Year Partnership

Logos, which became a unit of ESR last year as part of the Hong Kong-listed firm’s acquisition of ARA Asset Management, had set up the Logos Australia Logistics Venture with ADIA in November 2014 to acquire and develop assets in the country.

Tony Iuliano, international director and head of industrial and logistics for Australia and New Zealand at Cushman & Wakefield, along with his colleague, Gordon Marsden, who heads Asia Pacific capital markets for the company, are leading marketing of the portfolio, according to an agency representative who declined to comment further. Sources at Logos also declined to comment on the deal.

The Emirati investor made an additional equity commitment to LALV as recently as last March, with Logos saying the fresh cash would potentially expand the gross asset value of the JV portfolio to more than A$5 billion.

At the time of ADIA’s top-up last year, the LALV portfolio consisted of nine large, multi-tenanted logistics estates with a total end value of A$3.7 billion, including a major stake in a site in Mascot, near Sydney Airport, acquired in a deal announced in October 2021.

The 13.8 hectare (9.4 acre) airport site was purchased from Qantas Airways for A$802 million by a consortium of LALV and local pension fund AustralianSuper for development into a four-level logistics hub estimated to be worth A$2 billion upon completion.

The airport deal was announced three months after Logos, with backing from AustralianSuper, Canada’s Ivanhoe Cambridge, NSW Treasury Corporation and France’s AXA IM Alts, added 243 hectares to its portfolio by acquiring the Moorebank Logistics Park in Sydney for A$1.7 billion.

In August of last year, five months after ADIA’s supplemental commitment to the LALV vehicle, Logos announced that it had purchased an additional 7,956 square metre (85,638 square foot) site next to the Mascot plot to be used as part of a new Qantas training centre, which was said to be worth nearly A$40 million.

Deal Drought

Investors active in the Australian market told Mingtiandi that the sale of ADIA’s stake in the Logos portfolio will serve as a health check on the country’s shed market after Blackstone’s A$3.8 billion (then $2.9 billion) sale of the the Milestone Logistics portfolio to ESR and Singapore sovereign wealth fund GIC in 2021.

The Milestone purchase, including properties in Sydney, Melbourne, Brisbane, Adelaide and Perth, added 45 assets spanning 1.4 million square metres of gross floor area to ESR’s Australian holdings.

In a statement in June 2021, ESR noted that the Milestone acquisition was made at around a 4.5 percent cap rate, with a report by property consultancy Colliers indicating that industrial yields in Sydney averaged between 4 percent and 5 percent during the fourth quarter.

US-based Blackstone had marketed the Milestone portfolio through a two-stage tender process that attracted 10 first-round bids. The second round featured Logos, AXA Investment Managers of France, Australia’s Dexus and Singapore’s Mapletree making separate competing offers, before Logos and AXA reportedly joined forces.