ESR forms $1b Korea logistics JV with pension managers CPP, APG

Seoul, South Korea. Photo by Emile-Victor Portenart on Unsplash.

Global logistics real estate firm ESR Cayman Ltd has entered into a strategic partnership with Dutch pension administrator APG and Canada Pension Plan Investment Board (CPP Investments) to set up a $1-billion joint venture that will invest in South Korean logistics real estate.

ESR, APG, and CPP Investments have agreed to initially invest $200 million, $350 million, and $450 million, respectively, in the new development JV that will focus on developing industrial and warehousing logistics portfolio in Seoul and Busan.

The equity commitment gives ESR, APG, and CPP Investments 20 per cent, 35 per cent, and 45 per cent, respectively, of the total issued shares of the new joint venture that they named ESR-KS II. The partners also have the option to bring the total equity investment capacity to as much as $1 billion over time.

ESR-KS II is a successor to the $1-billion JV between the three partners that led to the development of 17 projects totalling 2.2 million square meters of gross floor area in the country. The vehicle was later upsized to $1.5 billion.

The vehicle, which represents one of the largest global logistics real estate capital raising so far this year, seeks to further explore logistics real estate opportunities in Seoul and Busan, two markets in South Korea with the largest populations and highest consumer spending.

“This will allow us to capture the next wave of growth and opportunity in a sector that even in these uncertain times is demonstrating resilience,” said Graeme Torre, head of Real Estate at APG Asset Management Asia.

The continued growth of South Korea’s e-commerce market is driving the demand for quality logistics facilities, according to CPP Investments, which has long considered Asia’s consumer sector as one of its key investment themes.

“This new joint venture deepens our longstanding relationship with ESR and APG. It will be key to our growth strategy in the logistics sector globally,” said Jimmy Phua, head of Asia Real Estate at CPP Investments.

ESR recently entered into a strategic partnership with Singapore’s sovereign wealth fund GIC to set up a JV with a total equity commitment of $500 million.

The joint venture, which marks ESR’s latest launch in a series of development vehicles, focuses on building institutional-grade logistics facilities in key cities across China.

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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.