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Ping An invests $300m in ESR’s Japan logistics portfolio

The Chinese insurer’s real estate investment platform has formed a programmatic joint venture partnership with e-Shang Redwood in Japan

Ping An Real Estate, the real estate investment and asset management platform of Chinese insurer Ping An Insurance, has invested over $300 million in a logistics development partnership with e-Shang Redwood (ESR) in Japan.

Through the programmatic co-investment joint venture, Ping An Real Estate can co-invest up to 50 percent in logistics development projects from ESR’s Japan pipeline, the firm said in a statement announcing the partnership.

ESR, the entity formed out of a merger between the Redwood Group and e-Shang in January this year, has a logistics development pipeline of over $1 billion in the country. Ping An Real Estate has so far committed co-investments for four projects located in Tokyo and Nagoya.

Commenting on the partnership, Charles de Portes, president of ESR said: “We are honoured by PARE’s commitment to ESR and proud to add Ping An Real Estate to our strategic investor relationships. Recent structural changes to the retail and logistics industries globally and within Asia have arguably put logistics real estate on a secular growth trend. Continued demand coupled with constrained supply of modern stock in Japan are predicted to lead to enduring returns for PARE and others invested in the product in the country’s largest metropolitan areas witnessing both urbanization and globalization of trade.”

Japan has been a key market for The Redwood Group even prior to the merger. Early last year the firm launched its second Japan-focused logistics real estate fund with a $500 million capital raising target. Following the merger announcement PERE learnt from sources that the target had been increased to $1 billion in response to increasing demand for logistics properties in the country. Should the firm achieve the fundraising target, Redwood Japan Logistics Fund (RJLF) II would end up becoming almost four times the size of its maiden Japan vehicle, RJLF that closed on $275 million in 2014.