ESR Group and its logistics subsidiary LOGOS have held an anchor close of the Hong Kong-based real asset manager’s new co-branded Pan Asia Core+ Venture (PACV), garnering $250 million in equity commitments.
The initial close was raised from German pension fund Nordrheinische Ärzteversorgung and a large US State pension fund, ESR said in a statement.
PACV is the first open-ended pan-Asian strategy focused on stabilised assets, targeting to enhance returns for investors with some exposure to value-add/develop-to-core strategies across the Asia-Pacific.
With the acquisition of ARA and LOGOS in January 2022, the PACV marks the second co-branded venture for the enlarged group, following the ESR LOGOS REIT.
PACV will invest in prime logistics assets across the Asia-Pacific with an initial focus on the developed markets of Australia, New Zealand, Singapore, Japan and South Korea. The fund will also have an allocation for strategic develop-to-hold opportunities across the region.
PACV’s first investment is in joint partnership with another LOGOS capital partner for a circa $200-million forward purchase logistics facility in the Seoul Capital Area, the LOGOS Siheung Logistics Centre, which will comprise dry and cold warehouse facilities when completed in early 2024.
The new vehicle is expected to tap APAC’s development workbook of nearly $12 billion, and add an estimated $35 billion of assets under management to the ESR and LOGOS portfolios over the next five years.
The Asia-Pacific logistics market “is continuing to see significant growth underpinned by the strong secular fundamentals of logistics real estate in this region, the growth in e-commerce and further dislocations in supply chains globally. On the back of these growth drivers, we continue to see strong demand from our tenant customers across the region for modern and sustainable logistics assets, which is leading to sizeable rent growth in most gateway markets,” said LOGOS Managing Director and co-CEO Trent Iliffe.
LOGOS group head of funds management Bart Coenraads anticipates a number of cyclical opportunities over the coming 6-12 months as markets adjust to higher interest rates. “PACV will also be focused on ESG, where we look to construct a portfolio of high quality ESG-compliant assets, delivering sustainable income and future proofing returns to our investors,” he said.
“While both ESR and LOGOS have traditionally focused on country-specific ventures, we both believe that many investors are seeking to gain diversified new economy exposure across the region through a private investment vehicle, and most investors neither have the capital nor the staff required to be able to build that diversified portfolio internally,” added Josh Daitch, ESR Group head of capital and fund management.
ESR manages over $140 billion in total assets, puffed by the January acquisition of ARA Asset Management and its subsidiary LOGOS.