ESR Sells Majority Stakes in Two Yokohama Warehouses to TPG

ESR has sold majority stakes in two Yokohama logistics properties to TPG, extending a run of disposals as the warehouse specialist steps up capital recycling.

The transaction involves ESR Yokohama Sachiura Distribution Centres 1 and 2, with US fund manager TPG investing through its Asia real estate strategy, the companies said Tuesday in a release. Financial terms weren’t disclosed, but Singapore-based ESR is retaining a minority interest and will continue to manage the assets.

The two properties are four-storey, double-ramp logistics facilities with a combined gross floor area of 390,000 square metres (4.2 million square feet). Completed in 2022 and 2023, they form part of the ESR Yokohama Sachiura Logistics Park spanning 33 hectares (82 acres) on the bayfront in Kanagawa prefecture. 

“We are pleased to have delivered a strong exit for our development investors and to have secured a high‑quality, established capital partner for the next phase of value creation with clear leasing upside ahead,” said ESR co-founder and co-CEO Stuart Gibson.

Earlier JV Exit

ESR had previously teamed with Angelo Gordon, which TPG acquired in 2023, to develop ESR Nanko Distribution Centre 1. The partners completed the Greater Osaka warehouse in 2016 and sold it to ESR Japan Income Fund in 2021 for JPY 29.5 billion ($259 million).

TPG’s $2.7 billion purchase of property-focused Angelo Gordon expanded the firm’s exposure to value-add real estate strategies in Asia, including Japan logistics. This latest deal was announced less than a week after TPG opened its new Tokyo office, underlining its push to scale up on-the-ground investment capabilities in Japan.

“We welcome the completion of this landmark investment in Japan’s logistics sector, which is a core investment theme for us and underscores our long-term commitment to the market,” said Patrick Bracha, managing director of TPG Asia Real Estate. “The sector continues to offer a compelling environment where active execution — such as leasing up, re-tenanting, and targeted upgrades — can drive attractive, risk-adjusted outcomes.”

For ESR, the sale continues a divestment drive as the group trims legacy holdings and rotates capital into new development and fund strategies following last year’s $7 billion privatisation.

Two months ago, ESR announced the sale of stakes in the newly built Yokohama Sachiura Distribution Centre 3 to France’s BNP Paribas Asset Management Alts and Dutch pension investor PGGM, while retaining a minority position. Around the same time, BNPP AM Alts sold a 49 percent stake in another ESR-developed warehouse north of Tokyo to a fund led by Dai-ichi Life, with ESR keeping a small residual interest.

Earlier this month, ESR secured $850 million in fresh equity from existing shareholders to provide dry powder for the group’s next phase of expansion. The company is owned by fund managers Starwood Capital, SSW Partners, Sixth Street and Warburg Pincus, along with the Qatar Investment Authority, the Ontario Municipal Employees Retirement System, Sumitomo Mitsui Banking Corporation and the ESR founders.

Mainland Strategy

In China, ESR has been channelling mature properties into income-focused vehicles backed by institutional investors, while maintaining fee streams through asset management.

Last week the group disclosed the launch of a China income fund seeded with logistics assets in Shanghai and Suzhou. With a total investment capacity of RMB 1.6 billion ($235 million), the vehicle is targeting stabilised industrial assets in eastern China.

ESR this week announced the acquisition of an industrial site in Suzhou via a fund backed by a “domestic dual-currency asset manager”, signalling continued pipeline expansion in mainland China. The planned development will feature five two-storey factory buildings, one single-storey supporting warehouse and one four-storey R&D building with ​​175,192 square metres of total area. Construction is set to commence in August 2026 and conclude by the end of 2027.

ESR is also negotiating the sale of a section of the BEA Finance Tower in Shanghai for RMB 1.6 billion as part of the disposal of assets acquired through the company’s $5.2 billion buyout of ARA Asset Management in 2022. In February an ESR-managed fund divested another former ARA property, the Platinum office tower near Shanghai’s Xintiandi area, for RMB 1.62 billion.