The listed Elanor Investors Group is set to unveil a fresh partnership with US heavyweight PGIM Real Estate in which the pair will set up a joint venture to acquire a 19ha last mile logistics development site in Melbourne.
They are among the players hoping to ride the wave of e-commerce business on the back of population growth in major cities despite a post-pandemic hangover in parts of the sector.
Others already active include David Di Pilla’s HMC Capital, which has $1bn ambitions in the area, Urban Logistics Co, which, backed by private equity real estate firm Wentworth Capital and US giant BlackRock Alternatives, is also aiming for a $2bn portfolio.
The Elanor/PGIM deal, in which they will outlay about $200m for the property, which will be developed into a new $600m complex, marks one of the largest industrial property transactions in Australia this year, and follows Elanor getting under way on another venture in the sector, where it is working with ICON Developments on developing $250m of prime logistics assets.
Elanor and PGIM will buy a keenly contested site at 522-550 Wellington Rd, Mulgrave, which will be redeveloped into a major last mile logistics estate in an area where supply is tight.
Elanor’s co-head of industrial and logistics Myron Poobalasingam dubbed the property an “unprecedented opportunity” to acquire an industrial and logistics brownfield site in one of Melbourne’s most densely populated areas.
It is being sold by Melbourne property identity Harry Stamoulis, who will exit profitably as he picked up the parcel for $90.75m in 2017. Real estate agents Dawkins Occhiuto are handling the transaction.
The property has access to major roads that will help it win e-commerce tenants which need to be close to a big swath of Melbourne’s population. It now houses a 68,000sq m storage facility leased to Woolworths until 2026 but the supermarket giant is moving out.
PGIM joins Elanor’s growing list of institutional partners. The real estate unit is a $US206bn ($309bn) arm of the US-based giant PGIM, the global investment management business of Prudential Financial. It has a strong track record of investing in Asia-Pacific real estate across offices, retail and debt. PGIM Real Estate head of Australia Steve Bulloch noted this year could be a good opportunity to access good real estate, saying it had made six strategic investments locally with a strong emphasis on the logistics and living sectors.
Notably, the US group has teamed with the founders of modular hotel chain Tribe and is moving on plans to set up a $750m portfolio of co-living facilities.
Elanor sets up unlisted trusts and partnerships to hold the assets it manages, and has been on the expansion trail after last year winning the backing of Middle Eastern powerhouse the Abu Dhabi Investment Council and buying Challenger’s Australian real estate funds management business that controlled a $3.4bn empire.
The deal is another milestone for Elanor’s industrial and logistics platform, which is experiencing significant demand from wholesale and institutional investors.
Elanor chief executive Glenn Willis said the last mile logistics investment would deliver strong investment returns for both PGIM Real Estate and Elanor.
The acquisition was the third successful capital raise completed this year in partnership with Elanor’s institutional distribution partner Fidante.
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