Industrial specialist ESR has entered into a preliminary deal to convert one of the group’s South Korean logistics properties into what’s billed as the nation’s first hydrogen-powered fulfilment centre.
ESR’s Korean unit, Kendall Square Asset Management, signed a memorandum of understanding with SK Plug Hyverse and Coupang Fulfilment Services to jointly take on the pilot project at the group’s existing Mokcheon Logistics Park, Hong Kong-listed ESR said Monday in a release.
The trio will install liquefied hydrogen storage infrastructure and charging stations and convert forklifts from conventional power to hydrogen fuel cell power at the 148,000 square metre (1.6 million square foot) property, which is fully leased by Coupang Fulfilment Services, a subsidiary of one of South Korea’s largest e-commerce platforms.
“We are extremely excited to collaborate with our partners to pilot this hydrogen-powered fulfilment centre,” said Jeffrey Shen and Stuart Gibson, co-founders and co-CEOs of ESR. “Aligned with ESR’s ESG 2025 Roadmap, our ambition is to maximise the renewable power generation at our properties in all operating markets and pursue potential business initiatives which focus on green energy.”
SK Plug Hyverse is a joint venture of Korean energy firm SK E&S and US-based Plug Power, a provider of hydrogen fuel cell systems. Logistics players are seeking to reduce their carbon footprint by adopting the hydrogen technology in forklifts to reduce charging time and extend operation.
The forklifts may operate for eight hours at maximum capacity with a single three- to five-minute refuelling, where heat and water are the byproducts of energy generation, ESR said. After piloting the system at Mokcheon Logistics Park in centrally located Chungcheongdo, the group plans to roll out the initiative at its other logistics parks in South Korea.
Thomas Nam, CEO of ESR Kendall Square, said the scheme aligns with South Korea’s ambitious goal to become a global leader in the development of hydrogen projects.
“With the partnership, we can now work with SKPH and CFS and leverage their great knowledge of the renewable space and strong footing in Korea, one of our most important markets, to accelerate in transiting to clean energy,” Nam said.
ESR Kendall Square’s properties have attained various green building credentials, including Asia Pacific’s first WELL Gold Certification for logistics real estate and a number of LEED Gold Certifications.
Cashed Up for Development
As of June, ESR had $14.4 billion in assets under management and 5 million square metres of gross floor area in South Korea across all real estate asset classes.
The logistics giant announced in July that it was upsizing its second Korean development joint venture with Dutch fund manager APG and the Canada Pension Plan Investment Board to as much as $2 billion in total equity investment capacity. Known as ESR-KS II, the JV was set up in June 2020 with $1 billion as the initial equity allocation.
In April, ESR unit Logos launched its first South Korean development venture alongside Dutch fund manager Bouwinvest and two unnamed institutional investors, aiming to deploy up to $1.3 billion to build logistics facilities in Greater Seoul.
Hewing to the green theme, Logos on Tuesday revealed plans to install and operate Australia’s largest rooftop solar installation at Moorebank Logistics Park in the company’s home patch of Sydney. Logos will work with renewable energy fund Solar Bay to fit out the estate with 60 megawatts of rooftop solar and 150 megawatt-hours of battery energy storage.
ESR also announced the resignation of the group’s longtime chief financial officer, Wee Peng Cho, for health reasons. In a Monday filing with the Hong Kong stock exchange, Gibson and Shen thanked Cho for his contribution during a nearly six-year tenure and confirmed the appointment of Ivan Lim as Cho’s successor with immediate effect.
Lim, who currently serves as CFO of Logos and sister firm ARA Asset Management, previously performed the same role at OUE, Mapletree Logistics Trust Management and Keppel REIT Management.