ESR-REIT's UE BizHub EAST. (Photo: REITsWeek)ESR-REIT's UE BizHub EAST. (Photo: REITsWeek)

This story is developing, and we will update our coverage along with new information and responses from the respective REITs involved. 

The managers of ESR-REIT and ARA LOGOS Logistics Trust (ALOG) have proposed to merge the two entities into a new Singapore REIT known as ESR-LOGOS REIT.

The proposed merger comes on the back of news that ESR will acquire ARA Asset Management.

The ESR-ARA transaction is set to create the largest real asset manager in the Asia-Pacific and the third largest listed real estate investment manager globally with a combined asset under management (AUM) of USD131 billion.

Over 50% of the enlarged ESR Group’s AUM will come from perpetual and core capital vehicles including 14 listed REITs.

The proposed merger to create ESR-LOGOS REIT will be effected by way of a trust scheme.

ALOG unitholders will receive a scheme consideration of SGD0.95 for each ALOG unit.

This comprises a cash payment of SGD0.095 and 1.6765 new ESR-REIT units issued at SGD0.51 each.

The aggregate scheme consideration is based on a gross exchange ratio of 1.863 times.

The total consideration for the proposed merger is approximately SGD1.4 billion.

ESR-LOGOS REIT will hold a portfolio of 87 properties including 20 in Australia, and 41 fund properties in Australia held through fund investments, totalling a net leasable area of 24.1 million square feet.

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By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.