The sponsor of Singapore-listed ESR-Reit files for HK listing

Media reports said that ESR Cayman, a logistics real estate developer, is looking to raise US$1 billion to US$1.5 billion (S$1.4 billion to S$2 billion) in a Hong Kong IPO.
Media reports said that ESR Cayman, a logistics real estate developer, is looking to raise US$1 billion to US$1.5 billion (S$1.4 billion to S$2 billion) in a Hong Kong IPO.PHOTO: BLOOMBERG

ESR Cayman, the sponsor of Singapore-listed ESR-Reit, yesterday said that it had on Feb 28 made submissions to the Hong Kong stock exchange operator for a proposed initial public offering (IPO) of its shares to be listed on the exchange.

Various media reports, citing sources, said that the logistics real estate developer is looking to raise US$1 billion to US$1.5 billion (S$1.4 billion to S$2 billion).

ESR, the largest Asia-Pacific-focused logistics real estate platform, was formed by a merger of Shanghai-based warehousing services firm e-Shang and Singaporean logistics real estate investment firm The Redwood Group in 2016.

It builds and manages logistics facilities that cater to e-commerce firms, bricks-and-mortar retailers and manufacturers. It also manages funds and investment vehicles that invest in logistics properties.

Warburg Pincus co-founded e-Shang in 2011 with two Chinese entrepreneurs and brought in investors such as APG Asset Management NV, CPPIB and Goldman Sachs. ESR is now 38.35 per cent owned by a Warburg Pincus subsidiary.

ESR said in its prospectus that it would use the proceeds of the share sale to pare existing debt, finance the completion of projects already in the pipeline, and to further expand its footprint through mergers and acquisitions.

  • 31%

    Percentage of ESR's revenue from warehouse rentals in the first three quarters of 2018, with another 58 per cent coming from management fees from its fund management business.

According to its draft prospectus, it made a net profit of US$132.7 million on the back of US$170.2 million in revenue in the first nine months of last year. The increase in bottom line was about 7 per cent year on year.

In the first three quarters of 2018, ESR made 31 per cent of its revenue from warehouse rentals, with another 58 per cent from management fees from its fund management business. Additional revenues came from construction services and sales of solar energy generated from its facilities.

CLSA and Deutsche Bank are the IPO sponsors.

A version of this article appeared in the print edition of The Straits Times on March 11, 2019, with the headline 'ESR Cayman files for HK listing'. Print Edition | Subscribe