ESR-REIT and ARA LOGOS Logistics Trust unitholders approve merger

Singapore 50 dollar bill

The unitholders of ESR-REIT and ARA LOGOS Logistics Trust (ALOG) approved the proposed merger of the two REITs in separate extraordinary general meetings (EGMs) held Monday. 

At ESR-REIT’s EGM, around 98.6 percent of the votes were in favor of the proposed merger, with the sponsor and its associates, the Summit Group and Mitsui & Co., abstaining from voting, the two REITs said in a filing to SGX Monday. 

At ALOG’s EGM, around 62.9 percent of ALOG’s unitholders representing around 92.5 percent of voting units were in favor of the merger, with the REIT’s manager and directors as well as concert parties with the ESR-REIT manager abstaining from voting, the filing said.

The combined REIT, to be called ESR-LOGOS REIT, or E-LOG, would hold a portfolio of logistics/warehouse, high-specification industrial properties, business parks and general industrial properties, with the combination set to be among the top 10 largest Singapore REITs (S-REITs) by free-float market capitalization, ESR-REIT has previously said.

E-LOG will focus on “new economy” segments such as logistics/warehouse and high-specification industrial properties, the filing said.

The combined portfolio will have 87 properties, including 20 in Australia, and 41 fund properties, or properties directly or indirectly via investment funds, in Australia, the filing said.

Adrian Chui, CEO and executive director of ESR-REIT’s manager, said the merger was “truly transformational.”

“The new E-LOG will see the combination of two best-in-class platforms with stellar track records to create a flagship REIT focused on the new economy sector in APAC, which is backed by the largest secular growth trends in Asia. The EGM results validate our belief that unitholders appreciate the importance of size and scale as we embark on our next phase of growth,” Chui said in the statement.

E-LOG will benefit from access to the sponsor ESR Group‘s portfolio of new economy assets valued at more than US$59 billion, with more than US$10 billion in work-in-progress development pipeline assets, the filing said. Initially, around US$2 billion of executable Asia-Pacific new economy assets will be available from ESR Group to accelerate E-LOG’s growth, the filing said.

Under the deal, ESR-REIT’s trustee will acquire all ALOG units held by unitholders in exchange for S$0.97 for each ALOG unit, payable as S$0.097 in cash and 1.7729 new ESR-REIT units, issued at S$0.4924 each.

The merger is expected to become effective by end-April, with ALOG to be delisted in May, the filing said. 

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