JD.com invests in PE-backed Asia logistics platform

The two companies want to develop their existing partnership - JD.com is a longstanding customer of ESR - across Asia with an emphasis on China. Zhenhui Wang, CEO of JD Logistics, predicted this effort would expand the Asian logistics ecosystem.

It follows a number of large investments in ESR last year, including a KRW372 billion ($334 million) commitment from Korean conglomerate SK Group and a $300 million pre-IPO round backed by Warburg Pincus and a Chinese consortium including China Everbright. ESR has reportedly planned to go public within 12-18 months.

In November, ESR received a $140 million equity investment from State Street Global Advisors and a number of funds associated with StepStone Group. The company, which has also received $300 million from Ping An Insurance Group and $100 million from Azerbaijan's state oil fund, was estimated to be worth $2.8 billion as recently as mid-2017.

ESR aims to exploit JD.com's resources and e-commerce expertise to develop its operations in areas including property development, fund management, and investment across Asia. It cited government data that tallied Chinese online retail sales at $307 billion during the first quarter of 2018, accounting for 21.4% of the global total.

"Leveraging JD's network effect and smart supply chain capabilities, together with ESR's exceptional penetration into both developed and emerging markets across Asia Pacific, this strategic alliance is poised to capitalize on megatrends in the region," Jeffrey Shen and Stuart Gibson, co-CEOs of ESR, said in a statement.

Formed in 2016 through the merger of Singapore-based warehousing company Redwood Group Asia and Chinese counterpart e-Shang, ESR manages about $12 billion of assets across China, Japan, Singapore, Korea, and India. This portfolio includes more than 10 million square meters of projects owned and under development. Fund management operations are based in Hong Kong and Singapore.

Recent expansion efforts include the launch of a $1 billion pooled investment vehicle that will focus on underdeveloped Japanese warehousing markets, as well as an agreement to acquire Cambridge Industrial Trust, a Singapore real estate investment trust with assets worth S$1.4 billion ($980 million). ESR is said to be targeting an expansion of its total assets under management to $20 million by next year.

Revenue improved 93% to RMB649.6 million ($102 million) during 2016. Profit during the same period rose from RMB58.9 million to RMB705.2 million.

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• Topics
• Greater China
• North Asia
• South Asia
• Southeast Asia
• Expansion
• Infrastructure
• China
• Asia
• Logistics
• JD.com
• e-commerce