ESR raises $1.2bn for Japanese logistics fund

Warburg Pincus-backed ESR has raised $1.2bn (€1.03bn) for its latest Japanese logistics fund.

ESR said Redwood Japan Logistics Fund 2 (RJLF2) recently conducted its final closing increasing total discretionary fund commitments to $575m after an existing LP - German insurance company Allianz - increased its earlier commitment to a total around $185m.

As previously reported, Allianz Real Estate initially invested ¥11bn (€87m) in the ESR-managed RJLF2 fund.

ESR said other RJLF2 investors include a Southeast Asian pension fund which made a $200m inaugural fund commitment, State Oil Fund of Azerbaijan (SOFAZ), a fund managed by Aviva Investors, and a German pension fund advised by Mercer, which is already invested with ESR in the predecessor fund RJLF1.

RJLF2 focuses on developing core logistics assets in Japan. 

The fund manager said projects undertaken by RJLF2 have also attracted co-investment capital from a US pension fund, an Asian insurance company, Equity International and long-time partner PGGM.

RJLF2 and the related co-investment capital have allowed ESR to capitalize up to $3bn worth of developments of which around 70% is already committed to nine projects, the manager said, adding that its current Japan pipeline suggests full commitment will be achieved in 2019.

Pierre-Alexandre Humblot, the head of private capital at ESR, said: “RJLF2 has provided several key ESR relationship and first-time investors in Japan logistics real estate a vehicle to access rare institutional quality development opportunities.

“While we expect large club vehicles to remain prevalent in Asia logistics real estate, we are intent where possible on making development opportunities in ESR markets accessible to discretionary capital in a range of investment sizes.”

Charles de Portes, ESR president, and Stuart Gibson, ESR co-CEO and head of the Japan operations, said: “The RJLF2 fund closing with its blue-chip roster of equity investors and co-investors, is one of the largest in Japan for the sector to date and a strong validation of the investment strategy.

“As the fund continues its rapid deployment in progress of RJLF2, we expect the combined ESR portfolio of prime logistics properties stabilized and under development in Japan to grow to over $5bn in value in the next two years.”

 

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