ESR draws more funding amid Asian logistics boom

CLSA invests in the logistics property developer also known as e-Shang Redwood, sealing its fourth private fundraising in 18 months.

ESR, the specialist Pan-Asian industrial property developer, has sealed its fourth private fundraising in 18 months amid continuing strong demand in the region for modern logistics assets.

Although the size of the investment was not disclosed, the company commonly known as e-Shang Redwood said on Monday that it had raised new capital from the Citic Securities One-Belt-One-Road Fund, a private equity fund run by CLSA.

That follows news last month that ESR had secured $306 million from JD.com as part of its strategic partnership with the Chinese e-commerce retailer.

South Korean conglomerate SK Holdings invested W374 billion ($333 million) for a 10% stake in ESR last August, seven months after the company raised $300 million from a group of Chinese investors including GF Securities, Huarong International and China Everbright.

The additional capital raised, which is expected to help pave the way for an eventual initial public offering of ESR shares, comes at a time of heightened interest in logistics assets in Asia-Pacific, driven by the region’s rapid urbanisation and rising wealth, as well as its high broadband and smartphone penetration, which is making it easier for people to order goods online.

Major recent transactions in the logistics sector include the $16 billion buyout last year of Global Logistic Properties, an Asia-focused logistic real estate operator with a warehouse portfolio of over 55 million square metres.

In October last year also, Chinese conglomerate HNA Group completed its take-private of CWT, a Singapore-headquartered integrated logistics company with 1.5 million square metres of properties worldwide.

And Jack Ma too is betting on Asia logistics. In April, the co-founder of Chinese e-commerce giant Alibaba signed an agreement with the Thai government to invest Bt10 billion ($320 million) to establish a logistics hub in the Southeast Asian nation.

MORE FIREPOWER

The four funding rounds completed by ESR since January last year will provide the third-party logistics services provider with more firepower to amass yet more logistics properties in the run-up to its listing.

“CLSA’s investment and resources will assist the company to expand its business into Southeast Asia and identity fund-level investors in China,” Rui Zhao, managing director of Citic Securities One-Belt-One-Road Fund, said in a statement.

ESR already owns over 10 million square metres of warehouses across China, Japan, Singapore, South Korea and India.

It has not indicated when and where it will pursue an IPO. Some analysts believe its main private equity backer, Warburg Pincus, might want to hold onto the assets for longer after it failed in its own bid for Global Logistic Properties.

Warburg Pincus co-founded ESR in 2011 and has since attracted investment from a host of global investors including APG Asset Management, Canada Pension Plan Investment Board, Goldman Sachs and Ping An Insurance. It currently manages assets valued at more than $12 billion. 

¬ Haymarket Media Limited. All rights reserved.