ESR looks to raise up to US$1.2bn in Hong Kong IPO

Asia Pacific-focused logistics property firm ESR is planning to raise as much as HK$9.76bn (US$1.24bn) from its initial public offering on the Hong Kong stock exchange.

Warburg Pincus-backed ESR announced it was offering 560.7m shares at a price range between HK$16.20 and HK$17.40 in a statement last week.

The firm has assets and developments spanning more than 12m sq.m. of gross floor area throughout the region and about US$16bn in assets under management.

IPO

“With our APAC focused strategy, we are confident that ESR will maintain its market-leading position,” said ESR co-founders and co-CEOs Jeffrey Shen and Stuart Gibson.

“ESR has the largest development pipeline in aggregate across the major APAC markets. With the increasing demand for modern warehouse facilities in the region, we are well-positioned to capitalize on this growth with strong on-the-ground execution and tenant sourcing capabilities.”

ESR manages 18 private third-party pooled investment vehicles and the Singapore-listed ESR REIT.

The firm opened up its books for the IPO, showing revenue grew from US$96.7m in 2016 to US$254.1m by end-2018 thanks to robust growth in its fund AUM.

ESR said net profit rose from US$105m in 2016 to US$213.1m last year.

ESR is the largest e-commerce landlord in the People’s Republic of China, with e-commerce players like Alibaba’s Cainiao, JD.com and Amazon on its tenant roll.

The firm, which also has operations in Japan, South Korea, Singapore, Australia and India, said it was the largest owner of logistics stock in the Seoul metropolitan area and had the largest development pipelines in the greater Tokyo and greater Osaka regions.

The offer opened to investors last week and will close on June 12, with shares expected to start trading on June 20.

Deutsche Securities Asia Limited and CLSA Capital Markets are joint listing sponsors, while Deutsche Bank, CLSA, Citigroup, Credit Suisse, DBS Asia Capital and Goldman Sachs will act as joint global coordinators, joint bookrunners and joint lead managers. BNP Paribas, CICC, Crédit Agricole, Mirae Asset Securities and UOB Kay Hian are also joint bookrunners and joint lead managers for the listing.

ESR has kept up its rapid momentum this year with a string of deals and capital raisings during the first six months of 2019.

The firm sold a portfolio of Japanese logistics assets to AXA Investment Managers – Real Assets, the property arm of the French insurer, and an unnamed sovereign wealth fund for US$1bn in January.

In April, it purchased a plot in the Greater Tokyo area, with plans to invest more than US$1bn to develop it into one of the biggest logistics parks in Japan, and then raised JPY 70bn (US$630m) in the closing of its ESR Japan Logistics Fund 3 last month.

The firm also completed its A$723m takeover of Australian industrial and office landlord Propertylink in April.

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