Hong Kong-based ESR Cayman Ltd announced that it has agreed to sell an 873,000 square meter balance sheet portfolio in China to an unnamed global institutional investor.
The announcement said the portfolio is worth about $730 million, with the transaction representing the largest self-developed balance sheet sell-down for ESR to date.
The portfolio, which is currently 98% occupied, consists of nine completed logistics and industrial assets with a total gross floor area of 873,000 sq m. According to the announcement, the portfolio spans major logistics and industrial hubs across different regions in China.
The announcement did not provide details about the investor but a Business Times report said the deal involved a new China income venture – ECN IV Offshore Holdings – owned by subsidiaries of GIC and ESR. DealStreetAsia has reached out to ESR for confirmation on the investor.
The transaction, which covers the Yangtze River Delta Region, the Greater Bay Area, and the Beijing-Tianjin, Hebei Region, expands ESR’s overall managed core portfolio to over 1.4 million sq m.
ESR Group currently has a development pipeline of 24.3 million sq m.
“Despite some near-term macro and geopolitical headwinds, this transaction is a further validation that institutional investors are increasingly drawn to the compelling long-term income potential of well-located, premium quality logistics portfolios in China developed by ESR,” said ESR co-founder and co-CEO Jeffrey Shen.
The deal comes a year after the group sold down over $800 million from its balance sheet, which translated into over $500 million of net cash that was subsequently to the group for future growth.
In May 2022, ESR Group also completed the successful tender of its 18.16% holding in China Logistics Property Holdings, representing $350 million of gross proceeds.
The Hong Kong-based firm also exited its investment in storage facilities manager China Logistics Property Holdings in May. ESR sold about 631 million shares or 18.16% stake in CNLP for HK$4.35 apiece, totalling about $350 million in cash.