Logos taps funder for Qube deal

Logos Group is understood to have hired an investment bank to secure funding for the acquisition of Qube’s Moorebank logistics facility.

All fingers were pointing to Macquarie Group on Tuesday, but the Australian-based investment bank said it was not involved.

Macquarie, which in recent years has taken stakes in global property funds, with a strategy of leveraging its networks to expand the businesses before staging an exit, sold its stake in Logos this year to ARA Asset Management .

Logos is understood to be in exclusive due diligence to buy the real estate of Qube’s $2bn Moorebank facility after sources said that the Australian business had put forward a knockout offer for the land at the Sydney-based inland port, as first reported by DataRoom.

The bid proved an upset in the contest, with some earlier saying that it may back out of the race because it would not have the same financial fire power as its competitors.

The company is believed to have fended off competition from Blackstone, Dexus Property Group and the Warburg Pincus-backed ESR.

Logos is an Australian-based logistics property specialist with operations across the Asia Pacific.

Its recent major shareholder, ARA, has $88bn in gross assets under management globally.

Other investors are Canadian real estate investor Ivanhoe Cambridge, which has $C64bn ($67bn) of real estate assets globally, and Logos founders, including joint managing directors John Marsh and Trent Iliffe.

An acquisition will add to the 1.2 million in square metres of logistics real estate across 13 properties that Logos already controls and carry on its spending spree that includes the acquisition of properties in Asian markets with pension fund backing.

Logos expanded into China in 2012 and in 2016 ex-Macquarie and Goodman executive Stephen Hawkins founded Logos’ Southeast Asia business.

The group later extended its reach into India, New Zealand and Vietnam.

It runs the ARA Logos Logistics Trust, a Singapore-listed real estate investment trust with 27 properties across Singapore and Australia.

The yet-to-be-completed Moorebank intermodal facility, in southwest Sydney, is the largest in the country, with the park covering 243ha.

It is being developed on a precinct comprising land owned by the Commonwealth and adjacent to land owned by Qube.

Woolworths is a key tenant.

Running the sales process for Qube has been UBS.

Most have expected Qube to sell between 50 and 75 per cent of the logistics park’s land trust and warehouse trust, worth $2bn, with Qube to retain the terminals trust.

The transaction is shaping up as the largest mergers and acquisition for 2020 in the real estate space.

While the global health crisis has weighed on landlords, the industrial property sector is seen as one of the most resilient, with online shopping in strong demand and offering some relief to the economic fallout.

Qube is selling the logistics park at a time that it is investing capital into its business.

In April, it raised $500m in equity to lower its debt levels, which are now at about 26 per cent of its earnings.