GIC-ESR Cayman acquisition of Blackstone assets to benefit industrial S-REITs: DBS

The joint acquisition by GIC and ESR Cayman of Blackstone Group’s industrial and logistics assets in Australia will benefit industrial Singapore REITs (S-REITs), says DBS Group Research analyst Derek Tan.

GIC and ESR Cayman are acquiring a portfolio of 45 assets for A$3.8 billion ($3.92 billion) or 10% above valuation, which Tan says sets a landmark pricing for the industry. The price implies a yield of around 4%.

Pursuant to the transaction, Tan believes year-end valuation exercises should see increased values for similar Australian assets. This, he says, should benefit select industrial S-REITs, particularly those which have logistics-focused exposure in Australia.