ESR brings in new strategic investor for 30% stake in prime cold storage logistics facility in Hong Kong

  • ESR is developing Hong Kong’s largest cold storage facility ever built in the last 20 years
  • Widens ESR’s partnership base and is in line with the Group’s asset-light and capital recycling strategy

HONG KONG, Aug. 21, 2023 /PRNewswire/ — ESR Group Limited (“ESR” or the “Company”, together with its subsidiaries as the “Group”; SEHK Stock Code: 1821), APAC’s largest real asset manager powered by the New Economy, has entered into an agreement with a strategic investor from Mainland China to sell a 30% stake in its Kwai Chung Cold Storage Logistics Centre development in Hong Kong. In 2022, ESR brought in Chinachem Group as an investor, which marked Chinachem Group’s first entry into logistics projects in Hong Kong.  With this transaction, ESR will reduce to own a 40% stake in the facility while continuing to act as the investment, development and asset manager.

Expected to be completed in 2027, Kwai Chung Cold Storage Logistics Centre has a strategic location at the junction of Mei Ching Road and Container Port Road South, within Kwai Chung in the New Territories, easily accessible by established road networks to Hong Kong’s central business districts, international airport, and the border to Mainland China.

The facility is developed on a 55,245 square-metre site (with a new 50-year lease expiring in 2072), which ESR had won via a Hong Kong government land bid on 20 July 2022. Maximising the allowable Gross Floor Area (GFA) of 138,000 square metres, it will have seven storeys and two basement levels of carparks. In March 2023, ESR further secured approval to add 8 metres of height to the building which makes for high clear headroom. The facility will also provide ramp access to all levels and automated logistics features.

Jeffrey Shen and Stuart Gibson, ESR Group Co-founders and Co-CEOs, said: “We are pleased to bring on board a new investor and widen our partnership base. This being the first logistics development project in Hong Kong for our new investor is a strong testament to ESR’s capabilities to develop an exceptional product for Hong Kong’s new economy, driven by the rising e-commerce, imported food and pharmaceuticals sectors. In line with our focus on ESR’s asset-light strategy, the transaction will also enable us to accelerate capital recycling while continuing to earn fees as we scale up the new economy portfolio under our management across Asia Pacific.”

Chang Rui Hua, Managing Director, Business Management and Investment, ESR Hong Kong, said: “ESR’s Kwai Chung facility is poised to cater to the strong demand for large-scale, high-quality cold storage logistics space in Hong Kong. It will set a new benchmark in the industry not only with its cutting-edge features such as automation but also a range of green features as companies look for more sustainable solutions in all aspects of their supply chain.”

Kwai Chung Cold Storage Logistics Centre targets to achieve Green Building Certifications, such as LEED Core & Shell Platinum and BEAM Plus New Building Platinum. ESR also aims to obtain green financing for this project given its many sustainable features. 30% of the site area will be designated for greenery, including a rooftop garden and there will be a recycling irrigation water system for the landscape area. Electric Vehicle (EV) charging points will also be installed at the carpark.

As of 31 December 2022, ESR Group has a development work-in-progress (“WIP”) of US$11.9 billion, the largest development workbook in APAC. The Group achieved a record US$6.5 billion of development starts as well as US$5.5 billion in completions which accelerated in the second half of 2022.  In Greater China, ESR has a total AUM of US$32.5 billion[1] and approximately 14.3 million sqm of GFA. 

[1] Based on FX translation as of 31 Dec 2022

About ESR

ESR is APAC’s largest real asset manager powered by the New Economy and the third largest listed real estate investment manager globally. With approximately US$150 billion in total assets under management (AUM), our fully integrated development and investment management platform extends across key APAC markets, including China, Japan, South Korea, Australia, Singapore, India, New Zealand and Southeast Asia, representing over 95% of GDP in APAC, and also includes an expanding presence in Europe and the U.S. We provide a diverse range of real asset investment solutions and New Economy real estate development opportunities across our private funds business, which allow capital partners and customers to capitalise on the most significant secular trends in APAC. ESR is the largest sponsor and manager of REITs in APAC with a total AUM of US$46 billion. Our purpose – Space and Investment Solutions for a Sustainable Future – drives us to manage sustainably and impactfully and we consider the environment and the communities in which we operate as key stakeholders of our business. Listed on the Main Board of The Stock Exchange of Hong Kong, ESR is a constituent of the FTSE Global Equity Index Series (Large Cap), Hang Seng Composite Index and MSCI Hong Kong Index. For more information on ESR, please visit www.esr.com

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SOURCE ESR Group Limited

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