Warburg-backed ESR closes $1b Korea logistics JV with pension funds

Seoul skyline. Photo: Pixabay.

ESR Cayman Ltd, a Warburg Pincus-backed global logistics real estate, has announced the closing of its $1-billion joint venture in South Korea with Dutch pension administrator APG and Canada Pension Plan Investment Board (CPP Investments).

The venture – ESR-KS II – is APG’s fourth development collaboration and CPP Investments’s third joint venture with ESR. It 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 ESR-KS II close reflects the excellent relationship we have with our capital partners and is a testament to the strong track record we have achieved in previous collaborations,” Jeffrey Shen and Stuart Gibson, co-founders and co-CEOs of ESR, said.

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. The partners also have the option to bring the total equity investment capacity to as much as $2 billion over time.

ESR-KS II will be seeded initially with a prime land site situated in Incheon City, on which a modern facility with a gross floor area of 154,422 sqm and a gross value of approximately W240 billion ($197 million) will be developed.

Thomas Nam, CEO of ESR-Kendall Square, ESR’s South Korean platform, said the venture will continue to identify quality assets and projects in the country, where e-commerce breakthroughs and a shortage of modern warehousing space are fuelling the continued growth of the logistics sector.

Recently, ESR 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.

Singapore Reporter/s

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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.