ESR, APG, CPP Investments to establish largest logistics real estate platform in APAC

Joint investments of US$1b will be made by APG, CPP Investments, and ESR.

Logistics property firm ESR Cayman has formed a joint venture (JV) with Dutch pension fund manager APG and CPP Investments to establish ESR-KS II, a press release revealed. It is slated to be the largest logistics real estate platform in APAC. The JV will have a total equity allocation of approximately $7.75b (US$1b) with options to further expand. The initial tranche of investments from ESR, APG, and CPP Investments will be approximately $2.71b (US$350m), $3.49b (US$450m), and $1.55b (US$200m), respectively whilst the expansion options could bring the total equity investment to $15.5b (US$2b) over time.

A prime land site in South Korea’s Incheon City was selected to house the development of a large-scale multitenant facility with a gross floor area of 154,222 sqm and a gross value of approximately $1.53b (US$197m). The facility is planned to serve as a last-mile distribution centre to support the robust logistics demand in the city, the press release added.

Thomas Nam, CEO of ESR-KS, said, “E-commerce breakthroughs and a shortage of modern warehousing space are fuelling the continued growth of the logistics sector in the country. The strategic location in a market with constrained supply makes the initial Incheon City seed asset a prime opportunity.”

ESR-KS II is APG’s fourth and CPP Investment’s third collaboration with ESR.