Warburg-backed ESR inks $179m loan facility with UOB for prime Tokyo land deal

120 Pioneer Road, ESR Reit

ESR, a logistics real estate developer backed by Warburg Pincus, has signed a ¥20 billion ($179 million) loan facility agreement with Singapore-based lender UOB to fund its land acquisition in Yokohama, Kanagawa Prefecture, Japan.

In a statement, ESR said, the loan from UOB and the equity investments from its capital partners, including Equity International and a major pension fund, will be used to fund the land acquisition, which is part of its plan to develop ESR Yokohama Distribution Center, one of the largest logistics parks in the Japan.

The project has an investment capital of over $1 billion in the first phase and will initially comprise two modern, four-storeyed logistics facilities with a total gross floor area of 393,226 sq m, out of a total buildable area of over 700,000 sq m on site.

The loan facility agreement was signed by UOB Tokyo Branch and ESR Sachiura TMKs, the onshore entities incorporated in Japan for the purpose of developing ESR Yokohama Distribution Center.

While the loan facility marks the first collaboration between UOB and ESR in Japan, the Singapore-lender has been supporting ESR’s expansion in other Asia Pacific markets, including China, Singapore, and Australia.

“We are committed to helping ESR expand its presence in the Asia Pacific. We look forward to extending our support to include cash and risk management solutions to assist ESR in optimising its cross-border business operations and cash flow,” said Lim Lay Way, head of Global Financial Institutions Group at UOB.

ESR Yokohama Distribution Center, strategically located within the Greater Tokyo Bay market, is backed by ESR’s Redwood Japan Logistics Fund 2 and investment partners including Sam Zell’s Equity International (EI) and a major US pension fund.

“With the support of UOB and other leading institutional investors, we are set to build ESR Yokohama DC as a flagship development not only for ESR’s growing network of best-in-class facilities, but also for the burgeoning Japanese logistics property market,” said ESR co-founder and co-CEO Stuart Gibson.

ESR is the largest Asia-Pacific focused logistics real estate platform by gross floor area and by the value of assets owned directly and by the funds and investment vehicles it manages. Its platform spans China, Japan, South Korea, Singapore, Australia, and India.

Early this month, ESR also announced its plans to invest around ¥35 billion ($314 million) in a new logistics facility in Toda, Japan.

The new facility, ESR Toda Distribution Centre, will be the fifth property in Saitama prefecture managed by ESR, after RW Kazo DC, RW Kawagoe DC, RW Kawajima DC and ESR Kuki, according to a company statement.

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