ESR has entered into an agreement with an unnamed global institutional investor to recap a prime logistics and industrial portfolio (total GFA of over 873,000 sqm) from ESR’s balance sheet in China.
ESR said the transaction represents the largest self-developed balance sheet sell-down for ESR to date, reinforcing the Group’s capital recycling strategy and asset-light approach.
The portfolio, currently 98% occupied, consists of nine completed logistics and industrial assets with a total GFA of over 873,000 sqm, spanning major logistics and industrial hubs across different regions in China, including the Yangtze River Delta Region, the Greater Bay Area, and the Beijing-Tianjin-Hebei Region.
With the transaction, the overall core portfolio managed by ESR with the investor now expands to over 1.4 million sqm.
Recognising sustainability as an important element to protect and grow the value of assets, ESR seeks to launch ESG initiatives such as increasing the rooftop solar power generation for the portfolio, in line with the Group’s priority to further enhance energy sustainability with an aim to work towards a 50% increase in solar power generation capacity by 2025.
Jeffrey Shen, Co-founder and Co-CEO of ESR, said: “We are very pleased to further expand our relationship with one of our long-time capital partners, with whom ESR has built a strong relationship and track record across strategies and markets. Despite some near-term macro and geopolitical headwinds, this transaction is a further validation that institutional investors are increasingly drawn to the compelling long-term income potential of well-located, premium quality logistics portfolios in China developed by ESR.”
“This transaction also represents the largest sell-down of ESR self-developed balance sheet assets to date. It is in line with ESR’s focus on accelerating its asset-light strategy which is an integral part of our longterm growth plan. With the completion of this sell-down, ESR Group is well-positioned to achieve another record capital recycling year as we seek to take advantage of increasingly more attractive pipeline
opportunities across APAC and build on the strength of our integrated platform, balance sheet, capital partners and customers to deliver long-term sustainable growth,” added Shen.