e-Shang Redwood is on its way to an IPO this year, and part of the preparation for that stock market debut seems to be some new acquisitions.
Already active in China, Japan and Korea, E-Shang Redwood has now expanded into southeast Asia with the purchase of an 80 percent stake in Singapore’s Cambridge Industrial Trust Management Limited, according to an announcement today by the trust manager. The acquisition gives E-Shang Redwood control over the manager of Cambridge Industrial REIT and its portfolio of 49 industrial properties in Singapore.
“CIT is a well-respected industrial REIT which has grown significantly since its IPO in 2006,” commented Jeffrey Shen and Mr Stuart Gibson, co-CEOs of ESR in a joint statement. “Our investment underscores our confidence in the underlying fundamentals and quality of CIT’s portfolio of assets, which provide us a strong platform for further diversification and growth into Singapore and key markets across Asia.”
E-Shang Redwood acquired its stake from subsidiaries of National Australia Bank and Singapore’s Oxley Global Limited for an undisclosed sum. Oxley owned a 24 percent stake in Cambridge, with NAB holding another 56 percent. The Transaction also involves E-Shang Redwood acquiring a 100 percent indirect interest in Cambridge Industrial Property Management Pte Ltd – the property manager of CIT. Completion of the transaction is expected to take place within this week.
The deal to acquire the trust manager follows ESR’s definitive option agreement in October last year to acquire as much as 10.65 percent of the units in Cambridge Industrial Trust from three existing unit holders. Following the completion of its acquisition of Cambridge Industrial Trust Management, ESR would exercise that option, making it the second-largest unit holder in the trust.
The Singapore transaction follows soon after ESR announced at the beginning of this month that it had closed on a $300 million round of investment led by a consortium of mainland investors in the run-up to a potential 2017 initial public offering.
Since being formed last January by the merger of Shanghai-based e-Shang with regional player The Redwood Group, ESR has continued to expand rapidly across the region. The company, which prior to the Cambridge deal had a portfolio of some 6.5 million square metre platform, says it has another 6 million square metres of projects in the pipeline.
E-Shang Redwood missed out on an attempt to gain a foothold in the Australian market last year when it backed away from an attempt to buy three portfolios of Aussie industrial assets from Goodman Group.
e-Shang was co-founded by Shen, Sun Dongping and Warburg Pincus in 2011 and focused primarily on mainland projects before launching a South Korean joint venture in 2014. Merging with The Redwood Group, which had been founded in 2006 by Charles de Portes and Stuart Gibson, allowed the expanded company to include Japan in its platform as well as expanding its China portfolio.