ESR-Manulife Venture Acquires $243 Million Real Estate Portfolio in China

(Deal Street Asia) — A new venture between logistics real estate major ESR Cayman and global insurer Manulife has completed the acquisition of four logistics properties in China for approximately 1.7 billion yuan ($243 million).

ESR announced that the acquisition involved four institutional-grade logistics properties from Redwood China Logistics Fund (RCLF), a limited partnership development joint venture between ESR and Dutch pension fund service provider PGGM.

The properties — located in Guangzhou, Kunshan, Wuxi, and Dongguan — comprise over 2 million square feet of net rentable area. The assets are all fully leased to a diverse mix of tenants, ESR said.

The transaction marks Manulife’s first standalone industrial investment in China and brings its real estate portfolio in the Asia Pacific region to 4.9 million square feet, according to the announcement.

“Industrial properties continue to be a favorable asset type to us globally given its defensive nature and strong growth potential. The acquisition fits well with our long-term investment strategy for the Asia Pacific market,” said Kenny Lam, senior managing director and head of Asia real estate investments at Manulife.

PGGM said the asset disposal is in line with its strategy to realize profits on some of its completed and stabilized China development assets.

“PGGM has strong conviction in the continued promising growth of the logistics property sector both in China and globally,” said Thijs Schoenaker, director of private real estate Asia Pacific at PGGM.

Co-founded by Warburg Pincus and its senior management team, Hong Kong-based ESR manages funds and investment vehicles backed by investors including Dutch pension fund manager APG, South Korean conglomerate SK Holdings, Chinese e-commerce giant JD.com, Canada’s biggest public pension fund CPP Investments, and Chinese insurer Ping An.

It has operations across China, Japan, South Korea, Singapore, Australia, and India. ESR, which had about $22.1 billion in total AUM by the end of 2019, went public on the main board of the Hong Kong Stock Exchange in November 2019.

In China, the total GFA of the portfolio assets held on the group’s balance sheet and in the funds and investment vehicles it manages comprised 6.9 million square meters, and the total AUM reached over $4.8 billion, as of Dec. 31, 2019.

This story was originally published by Deal Street Asia

Contact editor Yang Ge (geyang@caixin.com)