ESR raises $300m ahead of IPO

e-Shang Redwood (ESR) has raised $300 million from a consortium of Chinese investors ahead of a potential initial public offering (IPO) this year.

The pan-Asia logistics real estate developer and operator has raised the 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.

“We are very impressed by ESR’s fast growth and strong execution capabilities, which has laid a solid foundation for the company’s future,” Elyn Xu, head of structured finance at GF Holdings (HK), said in a statement. “Modern warehousing will continue to benefit from the rapid development of e-Commerce and the transformation of the retail sector in Asia, and we believe ESR is well-positioned to further enhance its strong leadership position.”

The $300 million equity will be invested across ESR’s key geographies, including Japan, China and Korea as well as other potential new markets, an ESR spokesperson told PERE.

ESR declined to comment on the specific timeline of its IPO, or how much the firm is targeting to raise before getting listed.

“The investment by a Chinese consortium is an important endorsement of ESR as well as in the growth potential of logistics real estate and modern warehousing in China and across Asia,” commented Jeffrey Shen, co-chief executive officer of ESR.

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 about $3 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.