On Monday, Asia-Pacific logistics real estate investor ESR announced it is partnering with Dutch pension fund asset manager APG and “another [unnamed] global institutional investor” to launch a new development platform focused squarely on Chinese logistics.
The new platform, to be called ECDP, is being funded with an initial equity commitment of $1 billion, with potential investment capacity of up to $4 billion over time, focusing on institutional-grade logistics facilities in major logistics hubs across China with a focus on Tier 1 and Tier 1.5 cities. ESR’s existing logistics real estate portfolio in China is valued at $6.7 billion in AUM, spanning 8.5 million square meters in gross floor area (GFA). ESR also holds the largest development pipeline in the country’s leading economic and logistics hubs: Greater Shanghai, Greater Beijing and Greater Guangzhou.
“Capital partner support has been key to the growth of ESR’s new economy real estate platform. We are thrilled to extend ESR’s successful collaboration and close relationship with these two leading institutional investors, with whom ESR has already delivered strong results in China and across the Asia Pacific region,” ESR Co-Founders and Co-CEO’s Jeffrey Shen and Stuart Gibson said.
“The acceleration of e-commerce continues to drive growth in China’s logistics market. What’s more, structural shifts in supply chain management, and consumers’ shopping habits and lifestyle changes are reshaping the market. These trends are opening new development and investment opportunities to ESR and our capital partners as the demand for advanced, large-scale and well-located logistics assets becomes even greater,” they added.
“The China logistics sector continues to be a critical part of the China growth story. We believe that building new assets designed to meet environmental standards and ever-changing occupier demand is one of the better ways to create a resilient portfolio for long-term performance. To do this, it is essential to have development partners that offer first-class sourcing and execution capabilities, which is why we have embarked on our second China-focussed platform with ESR,” said Graeme Torre, APG Head of Real Estate Asia Pacific.
Earlier this month, ESR announced plans to acquire sector peer ARA Asset Management for $5.2 billion, creating an Asia Pacific real assets giant with some $129 billion in AUM, more than double that of the second-largest manager in APAC, and creating the third-largest listed real estate investment manager globally
