ESR, AXA IM – Real Assets JV buys Tokyo logistics facility for US$368m

ESR, AXA IM - Real Assets JV buys Tokyo logistics facility for US$368m
Image : Courtesy of ESR

A joint venture between ESR Cayman Limited (ESR) and AXA Investment Managers – Real Assets (AXA IM – Real Assets) has acquired a logistics facility in Tokyo, ESR Kuki Distribution Centre (ESR Kuki DC), from Redwood Japan Logistics Fund II (RJLF II) and co-investors for JPY39 billion (US$368 million). The transaction marks the largest single asset acquisition by the joint venture to date.

Located in Saitama, Greater Tokyo, the logistics facility is a four-storey, double-ramp building with a GFA of 151,501 sqm (45,829 tsubo). Formerly the campus of the Tokyo University of Science, the site was rezoned by ESR, which in turn donated half of the land and the refurbished lecture theatres to Kuki city for use as a community centre.

“ESR Kuki DC is a state-ofthe-art development from our successful partnership with RJLF II capital partners and other coinvestors. We are delighted that the creativity and success of our in-house development management and leasing teams helped to enable the transaction to exceed our underwritten returns for the development vehicle and its investors, and creates an opportunity of generating long-term, stable income for our Japan core investors going forward. This highly successful transaction demonstrates the attractiveness and resilience of the logistics asset class against the backdrop of a challenging macroeconomic environment, reassuring our strong conviction in the APAC logistics sector,” said Jeffrey Shen and Stuart Gibson, Co-founders and Co-CEOs of ESR.

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“In the wake of the paradigm shift in online shopping and supply chain management accelerated by the Covid-19 pandemic, there is an increasing demand from institutional investors for premium logistics assets in various stages of the property life cycle. ESR will continue to capitalise on our leading development pipeline and deep capital relationships to fuel our platform expansion and support the robust growth of both our tenants and capital partners,” said Josh Daitch, ESR’s Group Head of Fund Management & Capital.

The joint venture participated in the acquisition of a core stabilised logistics portfolio in Japan in late 2018. This JPY100+ billion portfolio is comprised of interests in some of ESR’s highest quality assets in Japan, including ESR Fujiidera Distribution Centre in Osaka and ESR Namamugi Distribution Centre in Tokyo, providing long-term, stable returns for investors.