ESR Cayman said in a statement that the investments in its ESR Japan Income Fund (ESR JIF) is a cornerstone commitment from its sovereign fund backer and it is targeting a gross asset value for the strategy of $10 billion by 2026.

ESR co-founder and co-chief executive Stuart Gibson told the media, “The secular trends fuelling modern logistics real estate growth is still nascent. Logistics facilities are getting larger and larger to meet the increasingly complex needs of the tenants and we are now seeing $1 billion warehousing values. The Japan Income Fund’s scalable structure combines diversification with a capacity to meet this increasing capital intensity.”

Earlier this year, it was reported that ESR was planning to develop a logistics park in India for an investment of around $45 million. The new logistics park will be developed at Chakan near Pune.

The project spreads over 38 acre and will serve as the hub for light manufacturing and logistics operations. The logistics park will be ESR’s second development in Chakan. The company said in a statement that of the 38 acres, 26 acres are already leased and will be delivered by May 2021.

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The new joint venture formed by GIC and ESR Cayman will focus on Tier 1 and Tier 2 cities across India. To begin with, the JV will invest in a 2.2 million sq ft build-to-core asset, located around Mumbai.

Kishore Gotety, co-head (Asia ex-China) of real estate at GIC told the media, “Continued ecommerce growth in India over the long term, reinforced by rising internet penetration, is expected to drive strong demand for industrial and logistics assets. This is further supported by the emphasis on infrastructure development, changing supply chains, and low vacancy levels. This JV is well-positioned to benefit from these tailwinds, bring institutional-grade assets into this market, and generate resilient returns.”

The Government of Singapore Investment Corporation, formally known as GIC, is also expanding its reach in the European logistics and warehousing space through another joint venture. The joint venture is an establishment between GIC and logistics investment manager Melcombe Partners. GIC plans to acquire and develop last-mile distribution centres and urban logistics assets on the continent.  It is reported that the financial terms of the venture have not been disclosed. In recent years, GIC has been actively participating in acquisitions of global logistics assets.

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