ESR Group Limited, Asia-Pacific’s leading real asset manager, has successfully completed a significant acquisition in Japan, further cementing its position in the region’s logistics sector.
The company announced the purchase of ESR Aisai Distribution Centre, a state-of-the-art logistics facility, for ¥16.4 billion (about $111 million).
The acquisition, concluded on December 8, 2023, involves the complete trust beneficiary interest in the four-storey ESR Aisai DC, strategically located in Nagoya.
The transaction was carried out between ESR’s Japan Income Fund (JIF) and ESR Japan Logistics Fund III (RJLF 3), both integral parts of the company’s expansive portfolio.
Established in 2019, RJLF 3 focuses on the development of premier large-scale logistics facilities across Japan’s major metropolitan areas.
Meanwhile, JIF, set up in 2021, is ESR’s flagship logistics fund in Japan, emphasizing investment in stabilized, high-quality logistics assets in key urban areas including Tokyo, Osaka, Nagoya, and Fukuoka.
ESR Aisai DC boasts a net rentable area of approximately 58,000 sqm. Its prime location offers easy access to essential expressways and is currently fully leased to a variety of renowned third-party logistics (3PL) firms.
This acquisition is particularly noteworthy as it represents JIF’s inaugural investment in Nagoya, demonstrating the fund’s commitment to expanding its real estate portfolio in Japan.
With this latest addition, JIF’s portfolio now encompasses roughly 676,000 square metres of net lettable area, aligning perfectly with its strategy to diversify assets across Japan’s key logistics markets.
Stuart Gibson, Co-Founder and Co-CEO of ESR Group, emphasized the significance of the transaction, stating, “This deal not only showcases ESR’s robust platform, offering both real estate development and real asset investment solutions, but also highlights JIF’s effective governance, ensuring a mutually beneficial arrangement for all parties involved. This acquisition allows RJLF 3 a certain exit with no execution risk, while giving JIF preferential access to over US$5 billion worth of top-tier assets.”
Aileen Teo, Senior Fund Manager of JIF, expressed satisfaction with the fund’s first foray into Nagoya, underlining the strategic importance of the city’s market for the fund. “The Nagoya market, particularly given its connection to the flourishing automotive industry and supply-side logistics, offers vital portfolio and tenant diversification,” said Teo. “We plan to further expand in Greater Nagoya, leveraging ESR’s strong 3PL relationships to cover comprehensive distribution routes.”
As of June 30, 2023, ESR’s total assets under management (AUM) in Japan stand at US$29.9 billion, with a gross floor area (GFA) of 4.7 million sqm, underscoring its significant footprint in the Japanese real estate market.
PEVCJournal.com