Dexus (ASX: DXS) and APN Industria REIT (ASX: ADI) will fork out a combined $1.5 billion on a portfolio of industrial properties, with the bulk of the sum going towards a $1.3 billion acquisition of Jandakot Airport in Perth.
While the acquisitions will be undertaken through a partnership, Dexus is also the owner of ADI following its $320 acquisition of the trust, completed in August.
Under the agreement, Dexus will own two-thirds of the airport with ADI holding the remaining stake, while ownership will be split 50-50 on the $125.4 million purchase of a fund-through development in the Western Sydney suburb of Kemps Creek (Lot 2, 884-928 Mamre Road).
ADI will also take 100 per cent ownership of a logistics facility leased to Australia Post in the western Melbourne suburb of Truganina (2 Maker Place) for $69 million.
ADI announced it would be spending $368 million to acquire interests in a portfolio of 51 industrial properties, and will be raising around $350 million worth of capital through the entitlement offer at $3.45 per security, representing a 4.7 per cent discount. Dexus has committed to participating in the offer with $40 million.
Most of the 51 industrial properties are connected to the airport transaction.
Dexus CEO Darren Steinberg says the investments are of high quality and will further enhance the resilience of the company's portfolio.
"The near term development potential and scope to enhance returns by introducing third party capital make this a compelling opportunity, and one aligned with our priorities to grow our funds management business and recycle capital into high returning opportunities," Steinberg says.
"This transaction also provides the opportunity to achieve a step change for ADI as it secures an interest in quality logistics-oriented real estate with embedded development potential. We see considerable opportunity in ADI and will be supporting the equity raising announced today.
"In addition to the transactions announced today, we remain focused on meeting the investment objectives of our third party capital partners, with the Dexus Industrial Partnership (DITA) in exclusive due diligence on the circa $123 million acquisition of 113-153 Aldington Road in Kemps Creek, NSW."
Dexus' chief investment officer Ross Du Vernet says the transactions will leverage the group's strong development capabilities.
"The acquisitions will provide our industrial business with a meaningful footprint in Western Australia and new product in the Sydney market to service our growing customer base," Du Vernet says.
"Across the group, the industrial portfolio is expected to grow to $11.3 billion (4.6 million square metres) post completion of the near term developments and recent acquisitions."
APN Industria REIT fund manager Alex Abell says the transaction represents a compelling opportunity to achieve transformational growth and deploy capital into assets with significant value creation opportunities.
"The acquisitions capitalise on the strong momentum in the industrial sub-sector, with growing ecommerce take-up in Australia set to drive approximately 2.4 million square metres of industrial space takeup between now and 2025," Abell says.
"Following our entry onto the Dexus platform, we’ve benefitted from having access to unique growth opportunities as demonstrated by this transaction.
"The acquisitions also introduce a significant development pipeline that has the potential to deliver future value upside through further leveraging Dexus’s fully integrated platform."
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