Warburg Pincus-backed ESR Cayman calls off HK’s largest IPO this year

Co-CEO Stuart Gibson, Chairman Jeffrey Perlman and Chief Financial Officer Wee Peng Cho of the logistics real estate developer ESR Cayman Ltd attend a news conference on the company's IPO in Hong Kong, China June 5, 2019. REUTERS/Julie Zhu

ESR Cayman Ltd, a Warburg Pincus-backed pan-Asia logistics real estate platform, has announced the postponement of its proposed listing on the Hong Kong Exchange, cancelling what would have been the city’s biggest initial public offering (IPO) this year.

“In light of the current market conditions, the company, having consulted the joint global coordinators, has decided that the global offering will not proceed at this time,” ESR said in a statement.

A Reuters report earlier said ESR had targeted a relatively aggressive valuation, which had made the deal a hard sell amid challenging market conditions. The company was supposed to launch the IPO of as much as $1.4 billion.

Sources, however, said, the postponement was not about valuation but due to market conditions. “The IPO roadshow has recorded positive feedback from investors. But the current market situation is volatile. Hence the move to postpone the IPO,” the sources said.

In the official announcement, ESR thanked its prospective investors for their interest in the company, adding that the firm is committed to its continued growth and business development throughout the region.

“The company would like to express its gratitude to its prospective investors for their interest in the company, for their support and for their consistently positive feedback during the global offering,” ESR said.

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. It develops and manages logistics facilities that cater to e-commerce companies, bricks-and-mortar retailers and manufacturers.

As of 31 December 2018, the fair value of the properties directly held by ESR and the assets under management with respect to the funds and investment vehicles managed by ESR recorded approximately $16 billion.

ESR was formed in 2016 by the merger of the Japan-centric Redwood Group and China-focused e-Shang, which was co-founded with Warburg Pincus in 2011. Warburg Pincus held 38.4% of the group ahead of the IPO.

Last month, the firm expanded its reach in Singapore by acquiring a majority stake in Sabana Investment Partners (SIP), an investment holding company that owns Sabana Real Estate Investment Management and Sabana Property Management.