e-Shang Redwood (ESR) has secured a pair of new Tokyo-area sites as the Asian-based logistics developer continues to build up its portfolio in anticipation of a potential IPO later this year.
ESR paid an undisclosed amount to acquire the two land parcels in the Higashi Ogijima area of Kawasaki-city with plans to develop three state-of-the-art eight-storey warehouses yielding an eventual net rentable area of 560,000 sqm.
The new investment follows just days after ESR received a $300 million investment commitment from China’s Ping An Real Estate to support further investment in the Japanese market.
ESR Secures Pair of Sites in Popular Logistics Area
The warehouse builder and fund manager, which was formed by the merger of Shanghai-based e-Shang and Singapore’s Redwood Group in January of this year, is betting that the proximity of the combined 143,839 sqm to central Tokyo, major ports serving the city and Haneda International Airport will lead to strong leasing demand from e-commerce, retail and 3rd-party logistics tenants.
“The Bay Area in Tokyo has always been the highest demand location for large-scale modern logistics operators,” said Stuart Gibson, co-founder of ESR and head of its Japan operations. “Currently, facilities in this sub-market are running at full occupancy which confirms the strong fundamentals in the Japanese logistics market.”
The first land parcel has a total area of 77,723 sqm, while the adjacent second land parcel covers a total area of 66,116 sqm – both locations are currently tenanted. The combined site is in a popular area for logistics facilities, just 15 kilometres from central Tokyo, five kilometres from Haneda International Airport and 15 kilometres from Yokohama Port.
Putting Ping An’s Capital to Work Within Days
In a story first reported in Mingtiandi, ESR reported on Sunday that it had secured $300 million from Ping An Real Estate, the property arm of one of China’s largest institutional investors, to co-invest in future Japanese logistics projects.
ESR said at the time that Ping An had already committed to four co-investment projects in Tokyo and Nagoya, and the developer estimates it has a pipeline of projects to be started in the next 12 to 18 months that is worth over $1 billion.
According to sources familiar with the company’s plans, ESR is targetting an IPO to be valued at well north of $1 billion for sometime later this year.