EMP and ESR Australia have entered into a binding agreement with Blackstone to acquire the Milestone Portfolio for a total of $3.8 billion, subject to final clearance approvals.
The deal encompasses 45 assets across Australia’s major capital cities. With a land area of 3.6 million sqm and GLA of 1.4 million sqm, the site cover is 38 per cent and provides scope for further development. According to ESR, this will make it the third-largest logistics landlord in Australia with assets under management increasing to $7.9 billion.
The portfolio includes customers consisting of national, multi-national, ASX listed or government clients such as Woolworths, Lineage Logistics, Toll (Japan Post), Daimler Benz, Australia Post, Mazda and WesTrac.
ESR says the consideration attributed to the portfolio is expected to provide an initial yield of 4.5 per cent with a 6.9-year weighted average lease expiry.
Phil Pearce, ESR Australia CEO, describes the acquisition as transformative for ESR and EMP.
“The opportunity to secure such a large portfolio with extremely well-located assets across Adelaide, Brisbane, Melbourne, Perth and Sydney, strategically positions EMP to benefit from the continued growth in demand for warehouse space, particularly as the robust demand for logistics real estate is expected to remain strong due to sustained growth in e-commerce,” Phil says.
“The acquisition of the Milestone portfolio is a significant leap forward for ESR. This tremendous expansion not only adds immediate scale to our presence in Australia and the region, but also extends our footprint and reaffirms our commitment to one of our highest conviction markets in Asia Pacific,” Jeffrey Shen and Stuart Gibson, ESR Co-founders and Group Co-CEOs say.
The sale process commenced in January 2021 and more than ten first-round bids were received, subsequently reduced to five parties.
“It is hugely gratifying that the momentous effort put in by everyone on ESR Australia’s team has seen the realisation of this outcome. I wish to thank our team for their hard work and efforts which has enabled us to conclude this transaction with Blackstone,” Phil Pearce adds.
The transaction is subject to Foreign Investment Review Board (FIRB) approval being obtained.