JD Teams with Rava’s EZA Hill to Buy 4 Singapore Sheds From CapitaLand REIT for $237M

Jingdong Property, the logistics real estate investment division of China’s JD.com, announced together with EZA HIll Property Management on Friday that the two companies had teamed up to acquire a portfolio of four Singapore industrial properties spanning 1.9 million square feet (175,000 square metres). 

While the four properties were not specified, the facts of the portfolio align with a disposal by CapitaLand Ascendas REIT, which said when it first announced the transaction in August that it had sold the four assets for a total of S$306 million ($236.6 million). The CapitaLand-sponsored REIT had confirmed completion of the four-property sale on Wednesday.  

JD Property and EZA Hill, a portfolio company of Hillhouse Investment’s Rava Partners unit, had teamed up in 2023 to acquire five industrial properties in Singapore from ESR REIT, with JD and EZA Hill said to be aiming for Singapore-listed industrial REIT.

“The acquisition reinforces our commitment to the Asia Pacific region and to Singapore in particular, a regional centre for high-quality logistics infrastructure,” said Richard Law, regional CEO and head of Asia Pacific at JD Property. He added that, “This add-on investment also affirms our ability to scale assets in partnership with institutional investors and support the growth of our fund management business.”

Jurong East Properties Lead

The four properties in the portfolio, according to the CapitaLand Ascendas REIT (CLAR) announcement, are 31 Ubi Road 1, 9 Chang South Street 3, 10 Toh Guan Road and 19 & 21 Pandan Avenue, with the last property on the list, a five-storey ramp-up warehouse, accounting for S$140 million of the S$306 million deal. 

Also known as the Sen Kee Logistics Hub, 19 & 21 Pandan Avenue is located in Jurong East and spans 87,842 square metres of gross floor area, according to CLAR announcement. The logistics property has a remaining land tenure of 24 years.

The next most valuable property in the set is 10 Toh Guan Road, a six-storey warehouse, also in Jurong East, which has a 10-storey ancillary office tower. That asset, which changed hands at a price of S$84.5 million, spans 52,147 square metres and has a remaining land tenure of 30 years, according to the CLAR statement. 

Three of the four properties have a weighted average lease expiry (WALE) periods of 1.7 years or less, providing the new owners with opportunities to adjust leasing strategy for the assets. 

“This acquisition is a further testament to EZA Hill’s enduring partnership with Jingdong Property and our shared commitment to long-term growth in the Asia Pacific region, by combining our local expertise with Jingdong Property’s global standards, we continue to strengthen our Singapore portfolio with sustainable, high-quality logistics assets,” said Frank Ng, chief investment officer of EZA Hill.

Singapore REIT Expected

With JD Property and EZA Hill having earlier teamed up to purchase the five asset portfolio from ESR REIT, the two companies have now assembled a set of nine properties for what is reported to be a plan for Singapore-listed industrial REIT. 

Plans for the Singapore listed trust were first reported by Reuters in August, with Swiss investment firm Partners Group also said to be joining the REIT effort. A Bloomberg report in August had cited sources familiar with CLAR’s sale of this latest portfolio as indicating the Partners Group was joining EZA Hill in the purchase. The Swiss firm was not mentioned in Friday’s statement by JD Property and EZA Hill.

The effort by JD Property, EZA Hill and Partners Group to gain a Singapore REIT listing is said to involve a portfolio valued at more than $1 billion, according to the Reuters report. With JD and EZA Hill having paid $232 million for their 2023 acquisition and $236.6 million for this latest set of sheds, the reported valuation raises the possibility that there may be additional assets planned for the prospective REIT portfolio. 

Reuters pointed to the potential for the REIT to be listed on the Singapore stock exchange as early as next year. 

In 2023 JD.com had teamed up with Beijing’s Harvest fund management to list Harvest & JD Storage Logistics REIT, selling a stake in a portfolio of the company’s mainland China warehouses to a vehicle listed on the Shanghai stock exchange.