Pan-Asia logistics real estate developer and operator, e-Shang Redwood (ESR), has entered into a binding agreement to acquire an 80 percent stake in Singapore REIT Cambridge Industrial Trust Management (CITM).
The stake is being sold by subsidiaries of National Australia Bank and Oxley Global. Mitsui & Co owns the remaining 20 percent.
The transaction also sees ESR take a 100 percent indirect interest in Cambridge Industrial Property Management, the property manager of the REIT.
“CIT is a well-respected industrial REIT which has grown significantly since its IPO in 2006. Our investment underscores our confidence in the underlying fundamentals and quality of CIT’s portfolio of assets, which provide us a strong platform for further diversification and growth into Singapore and key markets across Asia,” Jeffrey Shen and Stuart Gibson, co-chief executives of ESR, jointly commented.
CIT has a portfolio of 49 properties located across Singapore, with a total gross floor area of approximately 8.4 million square feet and a property value of S$1.4 billion ($980 million; €921 million) as of September 30, 2016. The properties range from logistics, warehousing, light industrial, car showrooms and workshops to business park properties.
ESR is actively broadening its presence across Asia, and this transaction marks the firm’s initial foray into Southeast Asia. ESR will seek to grow the portfolio by actively assisting the CITM to source accretive acquisition opportunities in Singapore and across the region.
“We believe ESR will be the right shareholder of the manager to assist CIT to transform into a top-tier Singapore-based regionally diversified industrial REIT. We will continue to proactively manage the existing properties of CIT and examine opportunities to maximize value for unitholders,” said Ooi Eng Peng, independent chairman of CITM.
Earlier this month ESR raised $300 million in pre-IPO preferred equity investment from a group that includes China Everbright Limited, Huarong International, GF Investments (HK), SPDB International, and CMBC International among others.
Rumours of a potential listing have been doing the rounds ever since the Redwood Group and e-Shang merged to create ESR in January last year. In a blueprint interview end of last year, the firm’s executives told PERE that the markets have become more robust now and an IPO is planned for 2017 to enhance ESR’s funding capacity and grow the platform.
ESR currently has more than $6.5 billion in equity under management across Asia. Following the listing, around 50-60 percent of the firm’s capital will continue to come from its funds management business.