ESR and GIC to set up $673m joint venture to invest in China logistics facilities

SINGAPORE - Logistics real estate developer ESR Cayman and Singapore sovereign wealth fund GIC will enter into a joint venture with a total US$500 million (S$673 million) in equity commitment to develop institutional-grade logistics facilities in key cities across China.

Thw venture with GIC is subject to the relevant regulatory approval, Hong Kong-listed ESR, which is the sponsor of Singapore-listed ESR Reit, said in a media release on Monday (Jan 13).

The total gross floor area (GFA) of the China portfolio assets held on ESR's balance sheet and in the funds and investment vehicles it manages comprised 6.62 million square metres, while total assets under management (AUM) exceeded US$4.39 billion, as of June 30, 2019.

"We are excited to extend our partnership with GIC, riding on the successful collaboration the two companies have built in Japan," said Jeffrey Shen, co-founder and co-CEO of ESR.

"As home to the world's biggest e-commerce market, demand for logistics properties will continue to thrive in China as infrastructure such as modern warehousing will be a backbone of the new economy, serving the online and offline needs of retail businesses," he said.

Bloomberg reported last month that ESR, which is backed by private euity firm Warburg Pincus, is considering an initial public offering (IPO) of a real estate investment trust consisting of its South Korean assets that could take place as soon as this year. ESR raised US$1.8 billion in its own IPO in November.