NPS buys into $360m Australian logistics portfolio

Deal marks the genesis of a joint venture partnership between South Korea’s $320 billion state pension fund and ASX-listed property company and fund manager DEXUS Property Group.

South Korea’s $320 billion state pension fund, National Pension Service (NPS), has acquired a 50 percent stake in an Australian logistics property portfolio from Australian Securities Exchange-listed property company and fund manager DEXUS Property Group.

NPS has acquired the half share in a portfolio of 13 industrial properties at the Quarry in Greystanes, Sydney, the DEXUS Industrial Estate in Laverton North, Melbourne and the Target facility at Altona Melbourne, in a transaction valuing the assets at A$360 million (€306.7 million; $377.8 million).

DEXUS reported in its 2012 annual report today that the deal marks the beginning of a partnership between the two groups which has the potential to “more than double over a five year period”. As part of this partnership, the property company has agreed to provide NPS with an option to take positions of 50 percent in its future developments at the Quarry and Laverton sites.

DEXUS said the partnership enabled the group to diversify its capital sources which has been something of an ambition for the company over the past year. “The establishment of a new partnership with NPS co-investing alongside DEXUS in a selection of industrial properties is an exciting outcome,” the company said.

NPS counts real estate as part of its alternative investments which it wants to grow to 10 percent of its total assets by 2015. As part of that growth plan, NPS has deployed capital into real estate markets both directly and indirectly and has made investments in seven overseas markets including Australia.

In its tie-up with DEXUS, NPS is buying into a logistics market described by the property group as due to experience improving conditions. In its report, the company said easing monetary policies should have a positive outcome for retail sales and imports in Australia and that would positively affect demand for industrial space, which it said had been subdued in recent months.

DEXUS also invests in offices and retail properties as well as logistics. In total, the group manages A$13 billion of assets.