ESR Group to list its logistics firm REIT in China

The Chinese securities authority has approved the real estate asset management ESR Group to list its logistics real estate company there. The company anticipates raising around $336.02 million from the offering. The Hong Kong-based company proposed in December 2022 to spin off and separately list its logistics assets through a publicly offered infrastructure securities investment fund, or C-REIT, on the Shanghai Stock Exchange. The company has sponsored several REITs that are listed in Singapore, such as ESR-LOGOS REIT and Sabana Industrial REIT. According to the statement, Kunshan, Jiangsu Province, China, is home to three logistics facilities that are now held by the ESR C-REIT. The three assets will be managed by ESR's subsidiary, Shanghai Yizhishang Enterprise Management Services Co., after the IPO of ESR C-REIT. Stuart Gibson, co-founder and co-CEO of ESR Group, expressed confidence that the portfolio would establish a strong foundation for the continued growth of the C-REIT. He mentioned that it would also create more opportunities for collaboration with onshore financial institutions and investors in China. The company indicated that, while the final offer price of the REIT offering had not been disclosed, the projected annualised cash distribution rate by the REIT was 4.5% for 2024 and 4.62% for 2025. ESR disclosed that it would subscribe to a 34% stake in the C-REIT IPO, with cornerstone investors, public institutions, and retail investors subscribing for the remaining 66%.