The respective managers of ESR-REIT and ARA LOGOS Logistics Trust (ALOG) announced on Oct 15 the proposed merger of ESR-REIT and ALOG to create a leading New Economy and Future-Ready Asia Pacific S-REIT, which will be named ESR-LOGOS REIT or ELOG.
ESR-REIT will pay 95 cents for each ALOG unit. Of this, 9.5 cents will be in cash, and the rest in units through the allotment and issuance of 1.6765 new ESR-REIT units (the consideration units) at an issue price of 51 cents for each consideration unit. The proposed merger will be effected by way of a trust scheme of arrangement which will require unitholders’ approvals.
In their new capacities as Chief Executive Officer and Deputy Chief Executive Officer of the ELOG Manager respectively, Adrian Chui and Karen Lee will work together to grow ELOG in its next phase of growth.
See: CGS-CIMB ups TP on ESR-REIT, expects greater price upside
The proposed merger comes on the heels of ESR Cayman’s announcement to acquire 100% of the share capital of ARA Asset Management which via LOGOS owns 100% of the ALOG manager. The ESR-ARA transaction is set to create the largest real asset manager in APAC and the third largest listed real estate investment manager globally with a combined AUM of US$131 billion. The enlarged ESR Group will comprise mainly of New Economy real estate platform with over US$50 billion of AUM and which represents approximately 80% of the Enlarged Group’s EBITDA. Additionally, over 50% of the Enlarged Group’s AUM will come from perpetual and core capital vehicles including 14 listed REITs, which strengthens the Group’s fully integrated closed loop solutions ecosystem for capital partners and further enhances the platform’s earnings resilience and asset light trajectory.
As the largest sponsor of REITs in APAC, ESR Group is highly committed to the long-term growth of ESR-LOGOS REIT. It will be an integral part of ESR’s enlarged platform, leveraging ESR Group’s market leading AUM, development work-in-progress of over US$10 billion and pipeline of over 7.7 million square metres across 10 countries that represents over 95% of GDP in APAC. Post-merger, the total assets of the Enlarged REIT will grow to approximately $5.4 billion (approximately US$4 billion), making it one of the top 10 largest S-REITs by free float market capitalisation.
