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Redwood, e-Shang increase fund size post merger – exclusive

e-Shang Redwood (ESR), the entity formed out of a merger between The Redwood Group and e-Shang, has increased the target size of its Japan-focused real estate fund to $1 billion

e-Shang Redwood (ESR), the newly-created merged entity between Asian logistic real estate firms The Redwood Group and e-Shang, has increased the target equity size of its second Japan-focused logistics real estate fund to $1 billion amid increasing demand for logistics properties in the country.

PERE has learnt from sources that the firm now expects to reach a first closing on the Redwood Japan Logistics Fund (RJLF) II of around $500 million in equity by next month

If the first closing target is met, the firm would have raised the entire initial fundraising target for the vehicle in a single close. According to an earlier PERE report on the fund, institutional investors from North America, Europe and Asia are among the investors being targeted for capital raising.

RJLF II was launched by the Singapore-based logistics fund manager Redwood Group early last year with a $500 million fundraising target. 

The fund has a value-add investing strategy and the capital raised will be deployed in warehouse development projects across target markets in Japan.

Redwood declined to comment on the fund. However PERE understands the firm has already executed purchase and sale agreements on some projects where the fund’s capital will be deployed.

In a demonstration of the combined firm's expected capabilities and ambitions the target fund size for RJLF II is significantly greater than its sequel fund – Redwood Japan Logistics Fund (RJLF) – the firm’s maiden Japan-focused logistics vehicle that raised around $275 million in the final close in 2014 and is now fully invested. 

Unlike RJLF that was launched with a develop-to-core investing strategy and a longer investing period, RJLF II will have an intermediate fund life of approximately five years.

Last week, Redwood announced an all-stock merger with Shanghai-based e-Shang to create one of the largest logistics investment platforms in Asia with over 37 million square feet of fully-owned and under-developed logistics properties.