APAC focused logistics real estate platform ESR Cayman Limited has agreed to acquire 100% of the share capital of ARA Asset Management for US$5.2 billion.
ESR said its founders along with OMERS and JD.com (which in total represent all the shareholders who have representatives on the ESR board) with an aggregate shareholding of 46% have provided irrevocable undertakings to vote in favour of the transaction.
Founded in 2002 and listed on the SGX between 2007-2017, ARA is the largest real assets manager in Asia Pacific with New Economy real estate platform Logos.
With US$95 billion in gross AUM, ARA operates a diversified multi-product platform across assets, strategies and geographies in both the public and private markets, covering real estate investment trusts (REITs) and private funds in real estate, infrastructure / renewables and credit.
ARA executes its platform under its “Raise, Invest, Manage and Build” strategy. Group-wide, it has raised over US$16 billion in equity capital since 2016, which has supported a gross transaction volume of acquisitions, divestments and development activity of almost US$20 billion during the same period.
ARA currently owns a controlling stake in Logos, a logistics and data centre real estate developer and fund manager across Australia, China, Singapore, Indonesia, Malaysia, Vietnam, India, Korea and New Zealand.
On the back of its continued expansion across APAC, Logos’ total AUM has nearly doubled over the past two years to US$17 billion, comprising over 8.9 million sqm of property either owned or under development across 26 ventures, including the Singapore listed ARA Logos Logistics Trust.
Following the completion of the transaction, ARA’s business will be combined with ESR’s platform. The enlarged ESR Group will become APAC’s largest real estate and real asset manager powered by New Economy, and the world’s third largest listed real estate asset manager.
”The combined AUM will reach US$129 billion, of which over US$50 billion is in New Economy real estate, making it the largest such platform in APAC,” said ESR in the press release. ”Based on the financial results for 2020, over 80% of the enlarged ESR Group’s EBITDA will come from New Economy real estate, while more than 50% of its AUM will come from perpetual and core capital vehicles (including 14 listed REITs).”
“First, we want to welcome the ARA and Logos teams as well as our new strategic shareholders to the ESR family. This is an exciting time for ESR as we look forward to the promising future the combined platform is set to bring about. Post transaction, the enlarged ESR Group will witness immediate growth in size, scale and offerings – as global investors seek to give more capital to increasingly fewer managers, we are uniquely positioned to capture an outsized share of that capital. Additionally, we have always believed in the growth of logistics and data centre real estate and this transaction accelerates our vision considerably as our geographic reach will now extend across over 95% of GDP in Asia Pacific, total New Economy AUM will rise by 49% to over US$50 billion, portfolio GFA will increase by 44.3% to 29 million sqm and we will have ‘dry powder’ of US$7 billion to deploy into new logistics and data centre projects,” said Jeffrey Shen and Stuart Gibson, ESR Co-founders and Co-CEOs.
John Lim, ARA Co-founder and Deputy Chairman, said: “For close to two decades, ARA has established itself as a leading real asset manager with a successful track record across geographies, asset classes and strategies through multiple market cycles. We look forward to partnering with the ESR team, whose expertise, dedication and vision have led to building the region’s leading logistics real estate platform, and we can now together provide investors with a full suite of products with an outsized contribution from New Economy real estate.”
John Lim, together with a representative from each of CK Asset Holdings and Sumitomo Mitsui Banking Corporation, will be appointed to ESR’s board of directors. SMBC will also subscribe to a US$250 million placement of new ESR shares to reinforce its commitment to the enlarged ESR Group. The senior management of ARA and Logos will join the enlarged ESR Group to drive its next phase of growth.