ESR Kendall Square REIT Buys Icheon Logistics Park for $96M, Welcomes Korea’s Team Fresh

ESR Kendall Square REIT has acquired an Icheon logistics park for KRW 127 billion ($96 million), bringing the number of assets in the Korea-listed trust to 18.

The newly purchased asset, due to be completed this month, adds 46,041 square metres (495,581 square feet) of cold and room-temperature logistics space to the portfolio, the REIT’s manager said in a release.

The six-storey Icheon Logistics Park 7 has signed up Team Fresh to lease the entire facility for the next five years, marking the Seoul-based food distributor’s debut as an ESR Kendall Square tenant.

“The deal has garnered considerable investor interest thanks to its competitive pricing and high-quality tenant, while also being the first significant core logistics asset transaction in the South Korean market this year,” the manager said.

Cold Chain Specialist

Situated southeast of Seoul in Gyeonggi province, Icheon Logistics Park 7 is within 20 minutes’ drive of Yeongdong Expressway, Jungbu Expressway and Jungbu Inland Expressway, and just over an hour’s drive from the Gangnam Business District.

Cold chain specialist Team Fresh reported sales of KRW 230 billion in 2022, up from KRW 2.7 billion in 2018, the company’s first year of operations. Annual sales growth averaged 204 percent over the past four years.

Team Fresh’s logistics business provides three types of same-day delivery service, including a niche in early-morning cold deliveries. The company announced last month that it would expand its morning service area beyond Seoul and Chungcheong province to include the Busan, Ulsan and South Gyeongsang areas.

In the announcement, Team Fresh had promised the opening of a distribution hub in the first half of 2023 with the capability of handling 100,000 cases a day.

Pioneering Trust

ESR Kendall Square REIT’s portfolio comprises more than 1.2 million square metres of gross floor area, mostly in Greater Seoul. Assets under management of the trust, which is sponsored by Hong Kong-based industrial giant ESR, amounted to KRW 2.3 trillion ($1.7 billion) at the end of 2022.

After a $650 million IPO in December 2020, the first logistics-focused Korean REIT raised $400 million from a follow-on equity offering in late 2021.

The fresh capital raise marked the largest-ever follow-on offering for a KRX-listed REIT in terms of offering size, ESR said at the time.