ARA Logos unitholders must weigh pure-play logistics status against being part of a larger entity

THE manager of ESR-Reit appears determined that the industrial real estate investment trust (Reit) bulk up via a merger.

Less than a year after ESR-Reit's proposed merger with Sabana Reit failed to secure the 75 per cent approval needed from unitholders of the latter, the managers of ESR-Reit and ARA Logos Logistics Trust proposed a S$1.4 billion merger last week to form ESR-Logos Reit.

When the proposed deal with Sabana was announced, ESR-Reit was aiming to grow its total assets from S$3.2 billion to S$4.1 billion under the enlarged group. This time around, the merger with Ara Logos would grow its total assets to S$5.4 billion. New-economy assets such as logistics and high-specs industrial properties will account for about two-thirds of the gross rental income of ESR-Logos.