Lendlease buddies up with Morgan Stanley

Lendlease buddies up with Morgan Stanley

Australian real estate firm Lendlease Group announced that it has struck a 50-50 partnership with Morgan Stanley Real Estate Investing to purchase a portfolio of eight assets from a private logistics group. In an extension of their recent experience in building infrastructure networks in Lendlease Services only to be packaged up & sold off in July this year to Service Stream.

The assets comprise five leased industrial facilities and three development sites, with a developed value of approx. $430 million. EMKC will undertake development,  management and its APAC business the property and facilities management services for the sites.

Lendlease plans to expand the joint venture through further development opportunities sourced by the ASX-listed property giant and EMKC.

Over time, Lendlease will look to sell down part of its 50 per cent to institutional capital partners and maintain a co-investment stake.

The managing director of Lendlease Investment Management, Scott Mosely said, “The industrial sector has been a strong performer for Lendlease, and this acquisition provides additional scale and diversity to our industrial platform with development opportunities that are increasingly attractive to our investors,”

“The sector has experienced strong tailwinds over recent years that continue to accelerate. The growth in e-commerce, improvements in automation and the demand for last-mile logistics and pick-up convenience for shoppers are key themes that will continue to drive growth.”

The five operational assets are leased on 15-year terms and total approx. 100,000 sqm GLA. Located in prime industrial locations with excellent transport connectivity they comprise of assets located in Altona North Vic, Glendenning NSW (2 assets), Salisbury South SA and Richlands Qld.

The three developments sites are also located in core industrial precincts Altona North Vic, Truganina Vic and Lytton Qld.

Along with acquisitions made by Lendlease’s Australian Prime Property Fund Industrial, over the last four months Lendlease has through its funds and mandates acquired approx. $720 million in industrial assets.

Investment assets in the logistics portfolio were acquired on a yield of 4 per cent or even a little under, according to industry sources.

The transaction, brokered by CBRE’s Chris O’Brien and Rory Hilton, is but the latest in an industrial boom that shows no sign of slowing, and has pushed yields for prime logistics assets below premium CBD office towers for the first time.

Edward McKenna, Director and Co-Founder, EMKC said, “EMKC is delighted to be partnering with Lendlease and Morgan Stanley Real Estate Investing for the development and growth of the new joint venture industrial platform. With a strong focus on medium to large format industrial and logistics development across the East coast of Australia, EMKC is well placed to provide an ongoing pipeline of develop to core assets for the partnership over the coming years.”

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