International logistics developer e-Shang Redwood is boosting its platform in Japan with the completion of a new 178,000 square metre logistics facility in the Osaka area, its 17th project in the country, just a week after the company achieved LEED certification for a project in mainland China.
The pair of new facilities comes as the joint venture developer strives for a place among Asia’s biggest builders of warehouses. Co-founded by Warburg Pincus, ESR already manages more than eight million square metres of distribution centres across China, Japan, Singapore and South Korea, thanks in part to backing from investors including APG, CPPIB, Goldman Sachs, Morgan Stanley, PGGM and Ping An.
Finally, a Warehouse with a Play Area
The company’s latest facility, ESR Fujiidera Distribution Centre, is a five-storey, multi-tenant project located within Japan’s second-largest metropolitan region, according to a statement.
Located less than 2.5 kilometres away from four major expressways, the facility provides access to the cities of Osaka, Kyoto and Nara as well as to Osaka Port and the Kansai International Airport. ESR believes the proximity to all this infrastructure has helped spark demand for its newest shed.
“We have had significant pre-leasing activity and expect the project to be fully leased by year end,” said Stuart Gibson, co-founder of ESR and head of the company’s Japan operations in a statement. “Customer demand in Japan remains strong for strategically-located modern logistics facilities, in particularly those associated with growth of the e-commerce industry.”
The double-ramp, high-throughput project has grade A green credentials under Japan’s CASBEE standard, including roof-mounted photovoltaic panels that will provide 2 megawatts of clean energy. The “human-centric” facility also features an employee lounge area, a children’s daycare center and, in an unusual twist for a logistics building, an exhibition space showcasing ancient artifacts dug up from the site.
ESR Builds Up its Asia Logistics Platform
The announcement follows just a week after ESR said it had achieved LEED Gold certification for a recently completed facility in the city of Wuxi, in Jiangsu province west of Shanghai. The two-storey, 97,400 square metre project is located in Wuxi New District, a national development zone, and is fully leased to a major e-commerce logistics firm.
Last year ESR, which has a total China portfolio of 36 projects, also received LEED Gold certification for a facility in Kunshan close to Shanghai, and has another four projects in its China pipeline that are targetted to achieve the respected green label.
In late May, ESR announced that it had broken ground on another Japan project, a state-of-the-art, 156,000 square metre distribution centre in Kuki City, Saitama prefecture in the Tokyo area. The centre is due for completion in September 2018.
Joint Venture Player Could Get Much Bigger
ESR was formed in January 2016 through the merger of Shanghai-based e-Shang with Singapore’s Redwood Group, two of the region’s fastest-growing warehouse builders.
The logistics startup expanded into southeast Asia this past January by acquiring an 80 percent stake in the manager of Cambridge Industrial REIT, which has a portfolio of 49 industrial properties in Singapore. The company also has plans to invest $100 million in warehouses in India, it revealed last month.
In addition to US private equity giant Warburg Pincus, which co-founded e-Shang in 2011, ESR is backed by some of the world’s biggest investors including CPPIB, APG, PGGM and Goldman Sachs. This past January, ESR closed on a $300 million round of investment led by a mainland consortium as the firm prepares for a potential 2017 initial public offering.
Warburg Pincus was among two groups reported to be bidding on Global Logistic Properties (GLP), the $9.9 billion Singapore-based warehouse behemoth, when bids were closed at the end of June. Should Warburg Pincus and its allies win its battle with a team backed by GLP CEO Ming Mei for control of Asia’s largest logistics platform, ESR could be combined with GLP’s platform, which includes 252 logistics parks in China – the country’s largest such portfolio by almost an order of magnitude – and another 97 projects in Japan.