Hong Kong-listed warehouse owner ESR buys Singapore’s ARA for US$5.2 billion to create Asian powerhouse in logistics real estate
- ESR to pay US$4.7 billion in new stock and vendor loan, plus US$519 million in cash
- Deal to create a group with US$129 billion in assets, or more than twice its next Asian rival, with control over 14 listed REITs in region
Hong Kong-listed ESR will buy the Singapore-based firm for US$5.2 billion by issuing US$4.7 billion worth of new shares and loans and US$519 million in cash, according to a stock exchange filing. It will raise the cash via a stock placement and internal resources.
The deal will combine two of the region’s fastest growing platforms with new economy assets, which will account for almost 40 per cent of the enlarged portfolio, while catapulting them to first and second positions in every market across their operations. ESR’s US$129 billion portfolio will be more than twice the next largest manager in Asia-Pacific, and the company will be the third-largest listed real estate investment manager globally.
“We really think this is an incredible … kind of landmark … transaction within real estate and Asia-Pacific,” ESR chairman Jeffery Perlman said in a briefing.
When asked if ESR would expand globally, Perlman said the company was “very disciplined and focused on the opportunities in Asia-Pacific”.
GLP, another Singapore-based logistics player with more than US$110 billion in assets under management according data provided by the company on August 6, was taken private in a buyout by management and a consortium of Chinese private-equity funds in 2018.