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Treasury & Capital Markets
ESR China logistics Reit listing wins approval
Secured cornerstone investors include financial institutions, securities firms
The Asset 24 Jun 2024

The China Securities Regulatory Commission has approved Asia-focused logistics real estate firm ESR’s application for the registration and listing of its ESR China Reit, which is expected to raise around 2.438 billion yuan (US$334.4 million).

ESR will subscribe to a 34% stake of the real estate investment trust (Reit)’s initial public offering, and the remaining 66% will be subscribed by cornerstone investors, public institutions and retail investors.

The Reit has so far secured cornerstone investors, including leading financial institutions and securities firms. Starting from 2024, the annualized cash distribution rate is expected to be 4.5% and 4.62% for 2024 and 2025 respectively.

The Reit comprises three currently self-owned logistics facilities located in Kunshan, Jiangsu province, China. Kunshan, which is around 45 minutes from Shanghai, is a major hub for China’s last-mile logistics networks, backed by one of the largest consumer markets in China.

The three assets, collectively called Jiangsu Friend Warehouses, have a total global floor area of over 426,000 square metres (sq m) – Jiangsu Friend Phase I (over 135,000 sq m), Phase II (over 85,000 sq m) and Phase III (over 206,000 sq m). The assets have an average occupancy rate of over 90% in the last five years, tenanted by multinational companies in sectors, such as logistics, e-commerce and fast-moving consumer goods.

“The ESR China Reit adds to our stable of perpetual capital vehicles across the Asia-Pacific region,” says Jeffrey Shen, ESR’s co-founder and -CEO, “and completes the full range of investment products on offer to domestic institutional and retail investors in China, enabling access to the compelling fundamentals of the logistics real estate sector in China, which continues to benefit from positive tail winds, in a listed, liquid format.”

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