Dexus chases partner on $800m logistics portfolio

The property giant is looking for a partner on an $800m portfolio of logistics properties in one of the largest real estate portfolio offerings of the year.

Dexus, led by Darren Steinberg, is seeking a partner on an $800m portfolio of logistics properties in one of the largest real estate portfolio offerings of the year. Picture: Britta Campion/The Australian

Property heavyweight Dexus is seeking a partner on an $800m portfolio of logistics properties in one of the largest real estate portfolio offerings of the year.

Dexus is taking the 10-strong property portfolio to market via real estate agency JLL and is looking for a capital partner to take a 75 per cent interest in the properties, in which it will keep the remaining stake and run.

The industrial cycle has been running hard and there is still demand for logistics assets despite rising interest rates, with Dexus moving to capitalise on big institutions still pouring into the sector.

Big deals in recent years include Asian warehouse giant ESR buying the Milestone portfolio for $3.8bn and the Fife Capital portfolio trading in an $850m deal with PGIM and Manulife.

The latest play would also leave Darren Steinberg-led operation cashed up as it tries to lock in funds it has acquired as part of the acquisition of Collimate Capital‘s local operation, which manages about $28bn of real estate and infrastructure trusts.

JLL agents Tony luliano and Adrian Rowse are handling the campaign.

Dexus is launching what it termed a “scalable” industrial partnership which will be seeded with a portfolio of the eastern seaboard assets, with more than half weighted to the hot Sydney market. The remainder are in Melbourne and Brisbane.

The portfolio end value will be circa $800m with scope for growth, including further development opportunities.

An incoming partner will benefit from the expertise, scale and customer relationships of the Dexus platform, which manages more than $11bn of industrial property and a $2.5bn industrial development pipeline.

The portfolio is a core offering with eight of the ten assets stabilised. A project in the Brisbane suburb of Hemmant, which is pre-leased to Visy, and another in the Melbourne suburb of Truganina, are fund-through developments which Dexus will complete and deliver to the venture.

The offer is a chance for a new entrant to get into the local market at scale as just six industrial portfolios worth more than $700m have ever traded in Australia.

The partner will have access to new warehouses which Dexus builds in Sydney and Melbourne, providing significant future growth, with the portfolio estimated to spin off $36m once completed.

The assets already house more than 50 tenants including Visy, Brisbane City Council and Scott’s Refrigerated Freightways. There are also opportunities to lift rents in future.

Dexus already has a logistics venture backed by US private equity house Blackstone and others, including the Goodman Group and Charter Hall, run major industrial vehicles. GPT also has a $2bn wholesale partnership with Canada’s QuadReal Property Group.

Property companies are dramatically upping their exposure to the sector as values soar on the back of consumers switching to buying online, as lockdowns drove a permanent shift away from malls.