The $98 billion Future Fund has joined with Dexus Property Group to kickstart an industrial property portfolio with the firepower to reach $1bn of jointly owned assets.
The partnership has been seeded with a purchase of an industrial development site at the Quarry at Greystanes industrial precinct in western Sydney, in which both parties will have 50 per cent ownership.
The pair are aiming to grow the portfolio over the long term and will look to buy more sites, although it is not known what timeframe the parties want to reach its potential $1bn figure.
Dexus chief executive Darren Steinberg said the partnership would build on the group’s funds management business.
“We are pleased to welcome the Future Fund onto our third party platform and we look forward to partnering with them,” Mr Steinberg said.
The first property was bought off-market from building and materials construction supplier Boral for $50.5 million with the deal negotiated by CBRE’s Jason Edge and Peter Blade.
The site has masterplan approval for a $200m development project known as the Quarry West Corporate Park.
The land forms part of the former Prospect Quarry, which until 2007 had operated for more than 100 years. The balance of the 25ha quarry is already being developed by Dexus as the Greystanes Industrial Estate.
Dexus and the Future Fund aim to develop new facilities on a pre-lease or speculative basis over the next three years.
Dexus has already developed 170,000sq m of industrial property at the estate and the new purchase will allow for another 115,000sq m.
The Future Fund would not comment on the deal but it has an expansive Australian property portfolio, which includes a holding in Brisbane’s $600m Waterfront Place office tower, which it co-owns with Stockland.
The fund has local investments with Colonial First State Global Asset Management and CorVal Partners. It also invests with Lend Lease Investment Management in a major Perth shopping centre and has a partnership with Peet to develop greenfield sites on the edges of major cities in a venture expected to be worth more than $300m over 10 years.
Industrial property consists of 9 per cent of the fund’s property holdings, and has teamed up with a Dallas-based group for a $1bn industrial play.