The Redwood Group, the Singapore-based logistics fund manager, has announced a merger with e-Shang, the Shanghai-based developer and operator of warehouses, creating one of the largest logistics investment platforms in Asia.
The combined entity called e-Shang Redwood (ESR) will have a portfolio of over 37 million square feet of logistics properties owned and under development across China, Japan and South Korea, in addition to two funds management offices in Hong Kong and Singapore. The firms declined to disclose the valuation of the merged entity.
PERE has learnt that talks for the merger started around 18 months ago. The merger also brings together large institutional investors who have interests in the two firms. APG and Warburg Pincus own stakes in e-Shang while Sam Zell-led Equity International is a strategic partner in Redwood.
Jeffrey Shen, co-founder and chief executive officer of e-Shang; and Stuart Gibson, co-founder and chief executive officer for Redwood, will serve as co-CEOs of ESR. Charles de Portes, co-founder of Redwood, will be the president.
In a statement announcing the merger, Gibson and de Portes jointly said: “We are excited to partner with the teams at e-Shang, securing a market-leading position from which to offer our clients best-in-class services across Asia and a strong platform for future growth.”
The merger gives e-Shang a foray into fund management as well as the Japanese logistics real estate market. Redwood has been investing in Japan via its $275 million Redwood Japan Logistics Fund and is in the process of raising capital for a sequel fund. Additionally, the firm is also currently deploying $280 million in capital raised via its China-focused vehicle.
“The partnership with Redwood will add significant AUM, pipeline and equity relations as well as management and operational expertise to the team and I look forward to working closely with the Redwood founders to take the merged company to the next level as the leading real estate logistics player in the region,” e-Shang’s Shen said in the statement.
For Redwood, the merger has also facilitated its entry into the South Korean logistics market. e-Shang launched its operations in South Korea in late 2014. Kendall Square Logistics Properties (KSLP) was formed via a partnership with Thomas Nam, former head of Prologis South Korea, and Jihun Kang, who headed AMB’s operations in the region. In November last year, APG and CPPIB went on to form a $500 million joint venture platform with KSLP to make logistics investments in the country.