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QSuper has further expanded its global footprint with the purchase of a chain of north American trucking depots and agreements to expand them into a $3.5 billion transport logistics operation over the next five years.
The purchase increases QSuper’s stake in industrial property in a sector benefitting from the US trucking activity created by an increase in online shopping.
QSuper will initially invest $150 million in equity for a majority stake in the portfolio of 27 depots.
We will then invest capital to expand, acquire and develop industrial properties where they are needed. The depots are located across America’s midwest and south with leases to the country’s largest transport operators.
QSuper Head of Funds Management, Elizabeth Kumaru, said: “This is an attractive investment because of the locations of the properties, their zero vacancy rates and their attractive tenants. They are mission critical to the operators who have taken long-term leases.
The investment is made through Mercury Trust, owned in partnership with Jera Partners, LLC. It will be managed by Invesco Real Estate, one of two real estate managers QSuper works with in North America.
The depots are built to meet the needs of the “less than a truckload’’ market. This involves delivery of goods to hubs in regional centres, which are then reshipped or collected for delivery to their destinations. These are typically pallet loads of goods.
They are all in towns and cities ideal for easy transfer of goods.
The “less than a truckload” market represents a small part of the US trucking industry but performs a vital role in the American supply chain.
It serves the need to move freight that does not efficiently justify filling a whole truck. This approximates 150 million tonnes of freight annually.
QSuper Chief Investment Officer, Mr Charles Woodhouse, said the value of the investment was the upside of future development.
“We see growth in this part of the logistics sector and transport market and the use of depots to facilitate such freight movement will be at the heart of it,” he said.
“The Amazon phenomenon has changed both the nature of retailing and the industries that support it. We see this an entree to an important supporting industry.”
The logistics acquisition, if it grows as expected, could become QSuper’s largest physical American asset in a portfolio, which also includes:
Mr Woodhouse said: “We have a lot of faith in the American economy to both adapt and bounce back from COVID. Our other commercial holdings will be well balanced by a proven and diversified holding such as the logistics assets held in the Mercury Trust.”
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The opinions expressed and those providing comments are theirs alone, and do not necessarily reflect the opinions of the QSuper Board. No responsibility is taken for the accuracy of any of the information supplied and you should seek advice for your circumstances.
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