Warburg-backed ESR’s JV acquires Tokyo logistics facility for $368m

ESR Kuki Distribution Centre

ESR Cayman Limited, a Warburg Pincus-backed logistics real estate firm, announced Thursday its acquisition of a logistics facility in Tokyo for ¥39 billion ($368 million) through its joint venture with AXA Investment Managers – Real Assets (AXA IM – Real Assets).

In a press release, ESR said the joint venture has completed the acquisition of ESR Kuki Distribution Centre from Redwood Japan Logistics Fund II, the firm’s Japan-focused logistics development fund, and co-investors.

The property, formerly the campus of the Tokyo University of Science, is located in Saitama, Greater Tokyo and comprises a four-storey, double-ramp building with a gross floor area of 151,501 square meters.

ESR rezoned the site and then donated half of the land and the refurbished lecture theatres to Kuki City for use as a community centre.

The firm said the deal is the largest single asset acquisition by the joint venture so far. The ESR – AXA IM Real Assets joint venture has a portfolio of over ¥100 billion comprised of interests in some of ESR’s highest quality assets in Japan.

The portfolio includes ESR Fujiidera Distribution Centre in Osaka and ESR Namamugi Distribution Centre in Tokyo.

“This highly successful transaction demonstrates the attractiveness and resilience of the logistics asset class against the backdrop of a challenging macroeconomic environment, reassuring our strong conviction in the APAC logistics sector,” Jeffrey Shen and Stuart Gibson, Co-founders and Co-CEOs of ESR, said in a joint statement.

Hong Kong-based ESR is sharpening its focus on the acquisition and construction of more logistics assets after witnessing “minimal disruptions” in the first quarter of 2020 despite the COVID-19 pandemic.

ESR Cayman posted a 38.7 per cent growth in total assets under management (AUM) to $22.1 billion in 2019. Its Japan business reported revenues of $82.2 million, up 27.8 per cent from 2018.

The total AUM of ESR’s Japan portfolio grew by 47.7 per cent to over $7.7 billion at the end of 2019, while the gross floor area increased by 33.7 per cent to 3 million sq m.

“In the wake of the paradigm shift in online shopping and supply chain management accelerated by the COVID-19 pandemic, there is an increasing demand from institutional investors for premium logistics assets in various stages of the property life cycle,” said Josh Daitch, ESR’s Group Head of Fund Management & Capital.

ESR, he added, will continue to capitalise on its development pipeline and deep capital relationships to fuel its platform expansion and support the robust growth of tenants and partners.

Aside from Japan, the ESR platform spans across China, South Korea, Singapore, Australia, and India.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.