ESR, GIC to buy Australian logistics property portfolio from Blackstone for $2.9 billion

FILE PHOTO: The ticker and trading information for Blackstone Group is displayed at the post where it is traded on the floor of the New York Stock Exchange (NYSE) April 4, 2016. REUTERS/Brendan McDermid/File Photo/File Photo

HONG KONG (Reuters) - Logistics real estate manager ESR Cayman Limited said it will join with Singaporean sovereign wealth fund GIC to buy an Australian portfolio from Blackstone for A$3.8 billion ($2.9 billion).

The deal is the largest logistics and general property portfolio transaction in Australia to date, ESR said late on Sunday, making it the third-biggest logistics landlord in the country with asset under management increasing to A$7.9 billion.

Hong Kong-based ESR said it will contribute 20% of the equity in the investment vehicle with GIC contributing the remainder. The deal is expected to provide an initial yield of 4.5% with a 6.9-year weighted average lease expiry, ESR said in a statement.

The portfolio encompasses 45 income-producing assets across major cities including Adelaide, Brisbane, Melbourne, Perth and Sydney, covering a total land area of 3.6 million square meters (38.8 million square feet).

ESR shares rose 1% in early trading in Hong Kong, versus a flat broader market.

($1 = 1.2975 Australian dollars)

Reporting by Clare Jim; Editing by Stephen Coates