ESR Group receives CSRC approval for its public logistics REIT in China

 ESR C-REIT comprises best-in-class logistics facilities strategically located in Kunshan, a major hub for last mile logistics networks servicing the Greater Shanghai Area

ESR has secured cornerstone investors including leading financial institutions and securities firms

The ESR C-REIT will provide new channel to accelerate capital recycling 

SHANGHAI/ HONG KONG, 24 June 2024 – ESR Group Limited (“ESR” or the “Company”, together with its subsidiaries as the “Group”; SEHK Stock Code: 1821), today announced that its application for the registration and listing of ESR China REIT (“ESR C-REIT”) <中航易商仓储物流基础设施REIT > has been approved by the China Securities Regulatory Commission (CSRC) <中国证券监督管理委员会>. ESR is the Sponsor of ESR C-REIT, AVIC Fund is a licensed REIT manager under the current C-REIT listing rules, and China Merchants Securities Co., Ltd. is the financial advisor. As Sponsor and project manager, ESR will be able to provide ESR C-REIT with a future pipeline of assets for acquisition from its quality portfolio of assets under management (“AUM”) and development pipeline.  In China, ESR Group manages over 170 assets, with a total AUM of more than US$30.7 billion and gross floor area (“GFA”) of about 14.9 million sqm. Nearly 70% of ESR’s stabilised properties in China are located in major economic hubs in the Yangtze River Delta and Greater Bay Area where demand is driven by strong activity in renewable energy industries and cross-border e-commerce. 

ESR C-REIT is expected to raise around RMB 2.438 billion. ESR will subscribe to 34% stake of the C-REIT IPO, and the remaining 66% will be subscribed by cornerstone investors, public institutions and retail investors. ESR C-REIT has so far secured cornerstone investors including leading financial institutions and securities firms. Starting from 2024, the annualised cash distribution rate is expected to be 4.5% and 4.62% for 2024 and 2025 respectively.

The ESR C-REIT comprises three currently self-owned logistics facilities with best-in-class specifications and design, strategically located in Kunshan, Jiangsu Province, China. Kunshan, which is around 45 minutes from Shanghai, is a major hub for China’s last mile logistics networks, backed by one of the largest consumer markets in China. The three assets, collectively called “Jiangsu Friend Warehouses”, have a total GFA of over 426,000 sqm – Jiangsu Friend Phase I (over 135,000 sqm); Jiangsu Friend Phase II (over 85,000 sqm); and Jiangsu Friend Phase III (over 206,000 sqm). The assets have an average occupancy rate of over 90% in the last 5 years, tenanted by multi-national companies in sectors such as logistics, e-commerce, and fast-moving consumer goods. ESR started to develop Jiangsu Friend Warehouses since 2011 and has been the pioneer to build it into state-of-art 4-story logistics warehouses with the strong conviction to provide the best logistics facilities to the tenants. Post the listing of ESR C-REIT, ESR’s subsidiary Shanghai Yizhishang Enterprise Management Services Co., Ltd. will continue to manage the three assets.

Jeffrey Shen, ESR Group Co-founder and Co-CEO said: “We are honoured that CSRC has approved the registration and listing of our first C-REIT. The ESR C-REIT adds to our stable of perpetual capital vehicles across the APAC region and completes the full range of investment products on offer to domestic institutional and retail investors in China, enabling access to the compelling fundamentals of the logistics real estate sector in China, which continues to benefit from positive tail winds, in a listed, liquid format.”

Stuart Gibson, ESR Group Co-founder and Co-CEO added: “The approval and upcoming listing of the C-REIT ushers in a new chapter of exciting growth for us, reinforcing our market position as a leading manager of REITs in the APAC region and adding to our family of existing REITs in the logistics & industrial sector, namely E-LOG listed in Singapore and ESR Kendall Square REIT listed in Korea.  The REIT is an important pillar of our growth ambitions in the China market and expanded the channels to accelerate our capital recycling. The three seed assets represent some of our best assets in China.  We are confident this portfolio will set the foundation for us to continue to grow the C-REIT with additional assets contributed from our portfolio and bring more opportunities for us to collaborate with onshore financial institutions and investors in China, where strong growth in consumerism underpins a high tenant occupancy, translating into stable and sustainable returns for our investors.”

Chang Rui Hua, Managing Director, Business Management and Investment, ESR Hong Kong Limited, who is responsible for the C-REIT initiative, added: “The ESR C-REIT is a significant milestone for ESR, opening a new growth engine for the Group in China. We are also honored to work with a new partner AVIC Fund who shares our vision of establishing viable capital market fund raising vehicles to complete the entire investment cycle.” 

About ESR Group
ESR Group is Asia-Pacific’s leading New Economy real asset manager and one of the largest listed real estate investment managers globally. Our fully integrated fund management and development platform extends across Australia/New Zealand, Japan, South Korea, Greater China, Southeast Asia, and India, including a presence in Europe and the United States. We provide investors with a diverse range of real asset investment and development solutions across private and public investment vehicles. Our focus on New Economy real assets offers customers modern solutions for logistics, data centres, life sciences, infrastructure, and renewables. Our purpose, Space and Investment Solutions for a Sustainable Future, drives us to manage sustainably and impactfully for the communities where we operate and the spaces we develop to thrive for generations to come. ESR Group is listed on The Stock Exchange of Hong Kong (HKSE: 1821.HK). Visit www.esr.com for more information.        

About AVIC Fund
AVIC Fund Management Co., Ltd. (referred to as “AVIC Fund”), which is the manager of AVIC ESR Warehouse and Logistics Infrastructure REIT, is a national fund management company specializing in China Securities Regulatory Commission (CSRC) licensed activities, including fund raising, asset management, and public REITs issuance. Approved by the CSRC (license [2016]1249), AVIC Fund was legally registered on June 16, 2016. AVIC Fund is responsible for formulating and executing the overall strategy for this REIT issuance. Committed to building a distinctive brand in REITs, AVIC Fund currently manages 2 out of 36 C-REIT funds, namely AVIC Shougang Green Energy REIT (180801) and AVIC Jingneng Photovoltaic REIT (508096). Additionally, AVIC Fund actively expands into various sectors, including carbon peaking and carbon neutrality, warehousing, consumer, public housing, culture and tourism, achieving multi-format development. As a national fund management company held by AVIC Industry-Finance Holdings, AVIC Fund has a registered capital of 300 million RMB. Headquartered in Beijing, its business scope includes fund raising, fund sales, and asset management, which is licensed by the CSRC. AVIC Fund’s shareholders are AVIC Securities Co., Ltd. and Beijing Shougang Fund Co., Ltd.

About CMS
China Merchants Securities Co., Ltd. (referred to as “CMS”) is the financial advisor of the ESR C-REIT. CMS is an investment bank under the China Merchants Group, a Chinese State-owned enterprise with more than 100 years of history. Listed in both mainland China and Hong Kong (600999.SH, 06099.HK), CMS has served as the financial advisor on the issuance of 3 C-REITS – Bosera Merchants Shekou Industrial Park REIT, CICC Anhui Traffic Control REIT and AVIC Beijing Energy PV REIT. CMS will continue to support the listing of the ESR C-REIT with its professional service.

Media Relations

Tan Hock Lee
Associate Group Corporate Affairs Director
+65 6972 2193
hocklee.tan@esr.com