ESR, Manulife JV buys logistics real estate portfolio in China

ESR, Manulife JV buys logistics real estate portfolio in China

A joint venture between ESR and Manulife has acquired four institutional-grade logistics properties from Redwood China Logistics Fund (RCLF) for approximately RMB1.7 billion (approximately US$243 million).

RCLF is a limited partnership development joint venture between ESR and PGGM. PGGM is one of the Netherland’s largest pension fund service providers and is an existing and long-standing capital partner of ESR.

The acquisition involves a portfolio of four grade ‘A’ core logistics assets with over two million square feet of net rentable area. Located in Guangzhou, Kunshan, Wuxi and Dongguan, each building is strategically positioned with convenient access to key arterial expressways and local airports. As of June 30, 2020, the buildings are all fully leased to a diverse mix of high quality tenants.

This transaction marks Manulife’s first standalone industrial investment in China, demonstrating its commitment to growing its real estate exposure in the Asia Pacific Region.

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“We are thrilled to partner with ESR on our latest real estate investment in China. Industrial properties continue to be a favorable asset type to us globally given its defensive nature and strong growth potential,” said Kenny Lam, Senior Managing Director, Head of Asia Real Estate Investments, Manulife.“The acquisition fits well with our long-term investment strategy for the Asia Pacific market.”

“The disposal of assets is in line with our strategy to realize profits on some of our completed and stabilized China development assets as we continue to build a strong track record in our China investments. PGGM has strong conviction in the continued promising growth of the logistics property sector both in China and globally. Urbanization, coupled with a growing middle class, thriving ecommerce industry and buoyant consumption, are all positive drivers fuelling investments in logistics assets in China,” said Thijs Schoenaker, Director, Private Real Estate Asia Pacific of PGGM.

Jeffrey Shen, ESR Co-founder and Co-CEO, and Charles de Portes, ESR Co-founder and President, said in a joint statement, “We are excited about the new partnership with Manulife and the potential to grow this strategic relationship, not only in China but across other pan-Asian markets in which ESR operates. These properties represent some of the highest quality locations and asset specifications in ESR’s stabilized portfolio in China, and are a reflection of our very successful and ongoing partnership with PGGM.”