ESR sells stake in China Logistics Property for $350m

ESR sells stake in China Logistics Property for $350m
ESR Kawasaki Ukishima Distribution Centre

ESR has sold its 18.16% stake in China Logistics Property Holdings (CNLP) for HK$2.7 billion (HK$4.35 per share-US$350 million).

ESR became a shareholder of China Logistics Property in 2018 and its stake in the company was 18.16% as at 20 May 2022 with an average blended cost per share of HK$2.69.

Jeffrey Perlman, Chairman of ESR, said: “We are very pleased with our investment and final exit from CNLP which represents another highly successful outcome for ESR. Post the acquisition of ARA, we are very well-positioned with our strong balance sheet, active capital recycling efforts and accelerating asset light strategy to take advantage of an increasing set of more attractive opportunities in light of the current macro and geopolitical headwinds. Our focus will remain on the integration of ARA as well as leveraging our position as the largest real asset manager in APAC to deliver best-in-class New Economy developments and broader investment solutions for our capital partners and customers.”

Jeffrey Shen and Stuart Gibson, Co-founders and Co-CEOs of ESR, said: “With the US$350 million of tender proceeds, ESR Group is well-positioned to have a record capital recycling year as we further position ourselves to take advantage of what is likely to become a very compelling investing environment where we can leverage the strength of our best-in-class platform, balance sheet, capital partners and customers to deliver long-term sustainable growth.”

During FY2021, the group had over US$800 million of divestments from its balance sheet and received over US$500 million of net cash which was subsequently recycled back for future growth.

”Post the acquisition of ARA, on a pro forma basis, the enlarged ESR Group had a substantially reinforced balance sheet with low net gearing
(20.4%), robust liquidity (US$1.9 billion in cash) and a lower average cost of funding (3.8%) as of 31 December 2021,” said ESR in a statement.