GPT Group has signed a $1-billion joint-venture logistics deal with Vancouver-headquartered QuadReal Property Group as global interest in the sector skyrockets.
The GPT QuadReal Logistics Trust 2 will be operated and managed by GPT and used by QuadReal to scale its Australian logistics investments
It is the second JV between the pair—they partnered on an $800-million deal in 2021.
QuadReal is one of several major North American investment firms that has invested in the Australian logistics sector in the past 12 months, including Centuria’s US institutional partner, Starwood Capital, which acquired its fifth asset in the country this month.
The GPT-QuadReal partnership would be seeded with around $460-million worth of logistics assets in east coast urban infill and middle-ring locations, the partners said.
The fund will continue to focus on these areas as it targets deployment of another $500 million.
GPT will sell down “a number of balance sheet assets” to seed the partnership at book value and will retain a 20 per cent co-investment interest.
An estimated $410 million would be used by the group to reduce gearing until reinvested, it said.
QuadReal will have an 80 per cent, $400-million stake in the partnership.
QuadReal’s managing director, Asia, Nat Miller said that “the transaction has strong market fundamentals and reflects our high conviction investment strategy which seeks to build portfolios that are resilient across economic cycles”.
Implementation is expected by July, subject to Foreign Investment Review Board approval.
As well as the QuadReal partnership and Starwood Capital’s continued investment in the sector, US investment giant TPG Angelo Gordon acquired a majority stake in a Growthpoint industrial portfolio last year for $181 million.
Elsewhere, US-based Cabot Properties acquired a $135-million warehouse for its Sydney debut, as Cushman & Wakefield reported a “substantial” uptick in investment volumes in 2024.
Logistics and industrial markets experienced a 40 per cent year-on-year growth in investment volumes last year, it said, with total transaction volumes reaching $7.2 billion.
The agents predicted that transaction volumes for 2025 would continue to grow, hitting $10 billion, and that we may see interest from not only Japanese and US markets, but also European-based capital.
However, Cushman & Wakefield also expects yields to follow global compression trends with higher barriers to entry, especially in markets such as Sydney, driving yields down slightly to a predicted 5.65 per cent by the end of 2025 from the current 5.85 per cent.
