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ESR sets five-year $20bn AUM target

The pan-Asia logistics specialist is aiming to increase its total assets under management to between $20bn to $30bn in the next five years.  

Pan-Asia logistics provider e-Shang Redwood (ESR) has its eyes on boosting its assets under management (AUM) to between $20 billion and $30 billion in the next five years, executives from the firm told PERE.

The logistics real estate platform currently manages $9 billion in logistics assets across approximately 97 million square feet of projects owned, managed and under development in China, Japan, Singapore, South Korea, and India.

“We are going to do more in the logistics funds business in the next 12 to 24 months in China driven by strong demand or logistics facilities”

– Jeffrey Shen

In China, one of ESR’s key markets, the firm has embarked on a core strategy for its stabilized and completed logistics assets. To this effect, ESR has announced a joint venture partnership with the global investment manager Invesco Real Estate.

The JV – ESR’s first vehicle for stabilised assets in China – will hold a logistics portfolio valued at more than RMB 2 billion ($310 million; €260 million) according to an official announcement made this week. The three assets located in Shanghai and the Greater Shanghai region exceed 3.8 million square feet in size.

The assets held by the JV were earlier on ESR’s balance sheet. PERE understands that Invesco holds more than a 50 percent stake in the partnership via its Asia open-ended core/core-plus fund.

According to a May-end filing with the Securities and Exchange Commission, Invesco had garnered $891.3 million for the Invesco Real Estate Asia Fund. 

Speaking to PERE on the rationale for this strategy, Jeffrey Shen, co-chief executive officer and co-founder of ESR said: “We realize that the core fund structure is attractive as a long-term holding structure, as it allows us to be able to continue to provide the best services to our tenants and at the same time help us recycle capital to undertake more development projects.”

Currently, $900 million worth of completed logistics assets in China are on ESR’s balance sheet.

“This is our first JV partnership but in the future, we want to do both traditional funds as well as JVs. We are going to do more in the logistics funds business in the next 12 to 24 months in China driven by strong demand or logistics facilities,” Shen added.

In terms of deploying capital for its pipeline of projects, ESR will be using its own balance sheet capital as well as the two development JV partnership it currently operates with APG Asset Management and PGGM in China.