ESR, APG and CPP Investments have doubled the size of their South Korean logistics investment venture to $2bn (€1.95bn).
The trio established the ESR-KS II platform in June 2020, with $1bn as its initial equity allocation and options to upsize the vehicle to bring the total equity investment capacity to as much as $2bn.
CPP Investments is the majority stakeholder in the platform with an interest of 45%, with Dutch pension fund manager APG holding 35%. ESR has a cornerstone investment of 20% in ESR-KS II.
ESR said the joint venture had deployed more than 80% of the initial equity allocation and had more than 1.3m sqm of class A warehouse space under development.
Thomas Nam, CEO of ESR-Kendall Square, ESR’s South Korean platform, said: “The upsize of ESR-KS II reflects the collective confidence of our capital partners in ESR’s ability to capitalise on this secular opportunity.”
He added: “Institutional investment in the Korean logistics sector remains very strong as investors continue to rebalance their allocations towards logistics assets against the backdrop of e-commerce acceleration.”
Gilles Chow, managing director and head of real estate, North Asia, at CPP Investments, said: “Korea is one of the most sophisticated internet and e-commerce markets globally. We continue to see strong demand for quality logistics assets in the country.
“We are delighted to expand our successful partnership with APG and ESR to further capitalise on opportunities in the sector, which we believe will deliver steady, long-term returns for the CPP Fund.”
Graeme Torre, managing director and APG’s head of real estate, Asia-Pacific, said APG continued to be supportive of the Korean logistics sector, which complemented very well with its existing regional logistics exposure and offered very strong risk-adjusted returns.
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