United Overseas Bank has provided a financing facility for a real estate platform to acquire prime Tokyo Bay land with the purpose of building one of the largest master-planned logistics parks in the country.
The Singapore bank on Tuesday announced that its Tokyo branch has signed an agreement to provide a non-recourse $179 million (20 billion yen) financing facility to ESR’s entities so that the real estate developer can acquire land in Yokohama, Kanagawa Prefecture, Japan. Last month, ESR announced that it has bought land in Yokohama for the purpose of building one of the largest master-planned logistics parks in Japan.
«Through harnessing our product expertise and the strengths of our established regional network, we are committed to helping ESR expand its presence in the Asia Pacific. We look forward to extending our support to include cash and risk management solutions to assist ESR in optimizing its cross-border business operations and cash flow,» said Lim Lay Wah, Head of Global Financial Institutions Group, UOB, in a media statement.
The transaction marks the first collaboration between UOB and real estate platform ESR in Japan, both companies said. ESR Sachiura TMKs are the onshore entities incorporated in Japan for the purpose of developing the ESR Yokohama Distribution Centre (ESR Yokohama DC) project, one of the largest master-planned logistics parks in the country.
«With the support of UOB and other leading institutional investors, we are set to build ESR Yokohama DC as a flagship development not only for ESR’s growing network of best-in-class facilities but also for the burgeoning Japanese logistics property market,» said Stuart Gibson, co-CEO of ESR.
Located within the Greater Tokyo Bay area with swift access to Tokyo’s central business district and major logistics infrastructure, ESR Yokohama DC will initially comprise two modern, four-story logistics facilities incorporating ESR’s human-centric design and state-of-the-art building specifications.
With a total gross floor area of 393,226 sqm out of a total buildable area of over 700,000 sqm on site, the project is expected to be one of the largest multi-phased logistics parks currently under development in Japan in both size and value. The total investment for the first phase development is estimated to be more than $1 billion.
In addition to the loan from UOB, ESR will use the equity investments from its capital partners, including Equity International and a major US pension fund, to fund the land acquisition. ESR is the largest Asia-Pacific focused logistics real estate platform by gross floor area (GFA) and by the value of the assets owned directly and by the funds and investment vehicles it manages.
Cofounded by its senior management team and Warburg Pincus, ESR and the funds and investment vehicles it manages are backed by preeminent investors including APG, SK Holdings, JD.com, CLSA, Goldman Sachs, CPPIB, Ping An and Allianz Real Estate.