PE-backed ESR closes Japan logistics fund at $1.8b

According to a statement, two investors in the fund have agreed a commitment expansion option that would bring total investment capacity to as much as JPY530 billion over time. It will support development of existing large-scale pipeline projects across the Tokyo, Osaka, and Nagoya regions.

This is ESR’s third Japan fund. Its most recent vehicle for the country closed last year at $575 million. When combined with co-investment vehicles, Japan Fund II amounted to about $1.2 billion. Previous LP support for ESR’s Japan program has come from the likes of German insurance company Allianz, State Oil Fund of Azerbaijan, UK-based Aviva Investors, and German pension fund Mercer.

Last month, ESR received a JPY20 billion loan from United Overseas Bank to acquire land in the Tokyo Bay area, which connects to the city’s central business district and major logistics infrastructure. This will support development of the Yokohama distribution center, which is being touted as one of the largest planned logistics parks in the country at more than 700,000 square meters. The total required investment for the first phase of development has been estimated at more than $1 billion.

Formed in 2016 through the merger of Singapore-based warehousing company Redwood Group Asia and Chinese counterpart e-Shang, ESR claims to have $16 billion in assets under management, including directly-held properties and managed funds. Investors include CITIC Securities International Partners, State Street Global Advisors Asia, StepStone International, China Everbright, CMBC International Holdings, Huarong International Financial Holdings, and Ping An Insurance Group.

Earlier this year, the company filed for an IPO in Hong Kong that is expected to raise at least $1 billion. Warburg Pincus is the largest individual shareholder with an approximately 38% stake, according to the prospectus. It follows a number of operational advancements, including a partnership with Allianz that will invest $1 billion in India and an entry into Southeast Asia via the acquisition of Cambridge Industrial Trust, a Singaporean real estate investor with about $980 million in assets.

Japan is recognized as a rapidly growing logistics market due to investor interest in filling gaps related to local aging and labor shortage trends. Yoshiyuki Chosa, the president of Japan operations at logistics company GLP, described the country last year as his firm’s best performing market globally by any metric. Recent activity in this space includes Allianz investing $600 million in a fund managed by GLP that will invest across both Japan and China.

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• Topics
• North Asia
• Fundraising
• Infrastructure
• Real estate
• Japan
• Logistics