ARA Asset Management has become one of the bigger names in Asia logistics real estate following its majority acquisition of LOGOS Property Group, a manager with more than S$8 billion ($5.7 billion; €5.1 billion) of logistics property in the region.
The Singapore-based manager is understood to have acquired approximately 70 percent of shares from LOGOS’s three original shareholders, the Canadian institutional investor Ivanhoe Cambridge, Australian banking group Macquarie and the firm’s own management, according to three sources close to the situation. LOGOS declined to comment on the specifics of the transaction.
A sale of such magnitude was not originally on the cards. PERE understands LOGOS originally sought an additional shareholder to provide a larger balance sheet to grow the business over a year ago, not to sell a majority stake, according to two sources.
However, when ARA emerged as a potential buyer in the second half of 2019, its interest was predicated on the existing shareholders reducing their stakes to non-controlling positions, according to three sources.
“Nobody wanted to sell at the beginning and it was more about bringing somebody in than having anybody getting out,” said one of the three sources. “But for ARA to acquire a majority stake would require Macquarie to sell down quite a bit.”
Rather than retaining a small stake in LOGOS, Macquarie decided to exit as the discussion progressed, according to two of the sources.
In a statement, managing director Trent Iliffe said: “LOGOS has grown significantly over the past four years and always looks at options to further support its strategy, including strengthening its balance sheet. LOGOS has welcomed ARA as a majority shareholder with ARA’s complementary real estate platform.” He also noted that the transaction was a “natural exit point for Macquarie and LOGOS is very thankful for their support over the past five years.”
Macquarie was one of the earliest investors in the logistics specialist, with a 40 percent stake. The Sydney-based bank acquired its strategic stake in the firm in 2014 and assisted LOGOS in raising over A$5 billion ($3.23 billion; €2.88 billion) of external capital.
In 2016, the bank reportedly introduced Ivanhoé Cambridge as a 35 percent LOGOS shareholder after advising on its formation of a $400 million venture with the Canadian firm and Los Angeles-based manager CBRE Global Investors in China. Macquarie also partnered the logistics firm with Stephen Hawkins as part of the expansion of LOGOS into South-East Asia, with Hawkins becoming a co-founder and shareholder of LOGOS.
With $3.4 billion of equity commitments across 16 ventures, Iliffe told PERE there would be no change to the strategy as LOGOS’s founders remain with the business. He believed ARA’s real estate platform complemented the firm’s efforts to tap into different markets and strategies as it grows. For instance, ARA has already transferred its unit-holding in the S$1.3 billion Singapore-listed Cache Logistics Trust to LOGOS.
“Going forward, ARA can absorb a lot of the heavy lifting needs of operating a comprehensive funds management platform, which will better enable Logos’ investment teams to focus on their business development and growth plans,” said Moses Song, group chief investment officer at ARA Asset Management. “We see natural synergies.”
ARA, Ivanhoé Cambridge and Macquarie declined to comment on the transaction.
LOGOS from cradle to sale
2010 Founded by ex-Goodman executive John Marsh and ex-Lasalle executive Trent Iliffe
2012 Expands to China
2014 Macquarie acquires strategic stake
2015 Forms $400 million China development venture with Ivanhoe Cambridge and CBRE Global Investors
2016 Ivanhoe Cambridge acquires 35 percent stake
2017 Expands to India
2018 Expands to New Zealand
2019 ARA starts investment discussion with LOGOS in H2
2020 ARA acquires around 70 percent stake, Macquarie exits