ESR launches $240m logistics trust with China Merchants Capital

Warburg Pincus-backed real estate investment platform ESR has partnered China Merchants Capital Investment to set up a new logistics mandate that will target to grow its total assets to A$350 million ($240 million) within the next 12 months, per its press release.

The ESR Australia Logistics Trust (EALT) will be initially seeded with A$175 million ($120 million) through the disposal of ESR’s 11 wholly-owned assets located in Brisbane, Melbourne, Sydney and Perth, the company said in a statement.

ESR will continue to manage the properties within EALT.

“The establishment of this mandate is the first step in a strategy of releasing capital from our balance sheet to fund and accelerate our future developments,” said Phil Pearce, CEO of ESR Australia, a portfolio set up in 2018.

Pearce added that ESR was already working on a number of projects in its “robust development pipeline” in the country.

“Partnerships like the one with China Merchants Capital means we can continue to improve on the substantial growth we have already achieved in this market while delivering strong results for our investors,” he said.

Jeffrey Shen and Stuart Gibson, co-founders and group co-CEOs of ESR, asserted that Australia has long-term potential in logistics and industrial real estate.

“The establishment of EALT demonstrates the strength of our integrated business model using a capital efficient strategy to source and recycle capital,” they said.

“As last-mile delivery becomes increasingly important for supply chain efficiency, we believe occupier demand for industrial and logistics properties will continue to grow and drive up rents, especially in well-located industrial areas with supply constraint,” added Vincent Yu, managing director and CEO of China Merchants Capital’s real estate investment platform, China Merchants Frontier Capital.

This latest partnership came as ESR completed the buyout of Propertylink Group as well as the integration of Propertylink Group and Commercial & Industrial Property Pty Ltd. China Merchants Capital had earlier joined forces with Propertylink for a A$350-million co-investment vehicle in the industry.

ESR has recently acquired an industrial site at Horsley Park for A$142.5 million, after jointly purchasing a 4.67-hectare business park development site in Melbourne suburb Mulgrave area with Frasers Property Australia in a A$400 million deal.

With these acquisitions, the $20.2-billion company owns a total development pipeline of A$1.8 billion in Australia. ESR raised approximately $1.6 billion from its relaunched Hong Kong IPO and started trading its shares on the Main Board on November 1.

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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).

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

  • 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.