Quick Take: South Korean Conglomerate Buys 10% of E-Shang Redwood

E-Shang Redwood Ltd. (ESR), a major developer of e-commerce warehouses in Asia, has agreed to take a $330 million investment from a South Korean conglomerate that values the company at more than $3.3 billion.

The investment will give SK Holdings (SK) a 10% stake in the pan-Asian logistics real estate firm, which the South Korean company sees as more than a strategic equity investment. ESR’s 8.4 million square meters (90.4 million square feet) of warehouse space could be leveraged to satisfy SK’s needs in supply management while complementing its core businesses in e-commerce, telecommunications, and oil and gas.

ESR owns and operates warehouse properties in Asia, with more than $9 billion worth of real estate in China, South Korea, Singapore and other Asian countries. It was formed in early 2016 through the merger of E-Shang Cayman Ltd., founded by global private equity firm Warburg Pincus and two successful Chinese real estate entrepreneurs, and Redwood Group Asia, which owns and leases logistics properties in China and Japan.

ESR serves as a logistics landlord for many e-commerce companies and multinationals, including JD.com, Daimler AG and Carrefour SA.

The deal, which will be the largest minority stake that SK has ever taken in a company, comes on the heels of a landmark acquisition agreement by a Chinese-led consortium to take over Singapore-listed Global Logistic Properties Ltd. (GLP).

With assets of $39 billion, GLP is Asia’s largest logistics property company. It owns or leases 530 million square meters of warehouses and logistics-storage facilities.

Contact reporter April Ma (fangjingma@caixin.com)