Transaction represents ESR’s largest-ever sale of a self-developed balance sheet portfolio with plan to recycle capital into new and increasingly attractive opportunities in APAC
SHANGHAI and HONG KONG, July 4, 2022 /PRNewswire/ — ESR Group Limited (“ESR” or the “Company”, together with its subsidiaries as a “Group”; stock code SEHK: 1821), APAC’s largest real estate asset manager powered by New Economy, has entered into an agreement with a leading global institutional investor (“Investor”) to reconstitute a premier logistics and industrial portfolio (over 873,000 sqm total SBP) from ESR’s balance sheet. The transaction represents the largest self-developed project liquidation of ESR’s balance sheet to date, reinforcing the Group’s capital recycling strategy and asset-light approach.
The portfolio, currently 98% occupied, consists of nine completed logistics and industrial assets with a total GFA of over 873,000 m², spanning major logistics and industrial hubs in different parts of the Chinaincluding the Yangtze River Delta region, the Great Bay region and the beijing-Tianjin-Hebei area. With this transaction, the overall core portfolio managed by ESR with the Investor now extends to more than 1.4 million m².
Recognizing sustainability as an important part of protecting and increasing the value of assets, ESR seeks to launch ESG initiatives such as increasing solar power generation on the portfolio’s rooftops, in line with the Group’s priority to improve further energy sustainability with the aim of working towards a 50% increase in solar power generation capacity by 2025.
Jeffrey Shenco-founder and co-CEO of ESR, said: “We are very pleased to further extend our relationship with one of our long-standing financial partners, with whom ESR has established a strong relationship and track record in the set of strategies and markets. Despite some near-term macro and geopolitical headwinds, this transaction is further evidence that institutional investors are increasingly attracted to the attractive long-term income potential of well-located, high-quality logistics portfolios in China developed by ESR.”
As APAC’s largest real estate asset manager and new economy real estate platform, ESR Group has a development pipeline of 24.3 million sqm as well as WIPs of US$10.5 billion, the largest in APAC. The development pipeline in China amounted to 6.9 million m² and development activity remains buoyant thanks to the Group’s record leasing in China of more than 2 million m² in 2021.
“This transaction also represents the largest sale of ESR’s self-developed balance sheet assets to date. It is in line with ESR’s focus on accelerating its asset-light strategy which is an integral part of our long-term growth plan. completion of this sale, ESR Group is well positioned to deliver another record year of capital recycling as we seek to capitalize on increasingly attractive pipeline opportunities in APAC and build on the strength of our integrated platform, our balance sheet, our financial partners and customers to ensure long-term sustainable growth,” Mr. Shen added.
ESR Group continues to implement its asset light strategy. In 2021, the Group sold more than $800 million of its balance sheet. This resulted in more 500 million US dollars net cash which was then recycled back to the Group for future growth. In May 2022ESR Group has successfully finalized the tender for its 18.16% stake in China Logistics Property Holdings Co., Ltd (CNLP; stock code SEHK: 1589), representing $350 million raw product that will be recycled to fuel other growth opportunities in the future.
Completion of the transaction is subject to regulatory approval.
 More than 60% of the assets (by GFA) were self-developed by ESR.
ESR is APAC’s largest real estate asset manager powered by the new economy and the third largest listed real estate investment manager in the world. With US$140.2 billion of total assets under management (AUM), our fully integrated development and investment management platform spans major APAC markets, including China, Japan, South Korea, Australia, Singapore, India, New Zealand and South East Asiaaccounting for over 95% of GDP in APAC, and also includes a growing presence in Europe and in the United States We offer a diverse range of real estate asset investment solutions and new economy real estate development opportunities across our private fund businesses, enabling financial partners and clients to capitalize on APAC’s most important secular trends. ESR is the largest REIT sponsor and manager in APAC with a total AUM of 45 billion US dollars. Our purpose – Space and Investment Solutions for a Sustainable Future – drives us to manage in a sustainable and impactful manner and we view the environment and the communities in which we operate as key stakeholders in our business. Listed on the main board of the Bourse de hong kong, ESR is part of the FTSE Global Equity (Large Cap) Index Series, the Hang Seng Composite Index and the MSCI Hong Kong Index. More information is available at www.esr.com.
Chang Rui Hua
Group Head of Capital Markets and Investor Relations – Chief Executive Officer
+852 2376 9623 / +852 5506 7719
SSenior Director, Group Corporate Affairs
+65 6972 2192