Industrial giant ESR and its Logos subsidiary have closed on $250 million for their inaugural Asia core-plus logistics fund, boosted by a $100 million commitment from the Employees Retirement System of Texas.
Pan Asia Core+ Venture is the first co-branded private fund for Hong Kong-listed ESR and Sydney-based Logos and the second co-branded vehicle overall, following the merged ESR-Logos REIT, the companies said Tuesday in a release.
PACV’s initial fundraising, led by Logos, includes anchor investments by German pension fund Nordrheinische Aerzteversorgung and a second institutional partner described as a large US state pension fund. ERS, a $35 billion pension fund for Texas government workers, confirmed to Mingtiandi on Monday that it had made a $100 million pledge to the new vehicle in August.
“We are pleased to welcome NAEV and the US state pension to this venture,” said Logos managing director and co-CEO Trent Iliffe. “Their strong interest in PACV is testament to the continued long-term growth story of the Asia Pacific logistics market, which is continuing to see significant growth underpinned by the strong secular fundamentals of logistics real estate in this region, the growth in e-commerce and further dislocations in the supply chains globally.”
Korean Shed Leads Off
The open-ended PACV will seek prime logistics assets across Asia Pacific with an initial focus on the developed markets of Australia, New Zealand, Singapore, Japan and South Korea, where the vehicle has made its first investment in a Greater Seoul logistics facility.
The fund joined with another Logos capital partner on the $200 million forward purchase of the Logos Siheung Logistics Centre, a 100,000 square metre (over 1 million square foot) dry and cold warehouse to be completed in early 2024.
PACV anticipates exposure to value-add/develop-to-core strategies and will also allocate capital to strategic develop-to-hold opportunities across Asia Pacific.
“While both ESR and Logos have traditionally focused on country-specific ventures, we both believe that many investors are seeking to gain diversified new economy exposure across the region through a private investment vehicle, and most investors neither have the capital nor the staff required to be able to build that diversified portfolio internally,” said Josh Daitch, ESR’s head of capital and fund management.
The pan-Asian strategy will leverage the group’s $12 billion development workbook and an estimated $35 billion in additional assets under management to be completed in the ESR and Logos portfolios over the next five years.
The global economy may be slowing, but Asia-focused real estate funds continue to draw capital from deep-pocketed US state institutions.
ERS’s latest Asian bet comes on the heels of the Texas pension manager’s $50 million capital commitment to an APAC infrastructure strategy launched by private equity giant KKR. The fund, KKR Asia Pacific Infrastructure Investors II, was set up in April and secured its investment from ERS in May.
Earlier this year, ERS announced a $50 million commitment to Hong Kong private equity firm PAG’s third pan-Asian core-plus/value-add real estate fund.
Another US pension manager making bold moves is the State of Wisconsin Investment Board, which earlier this month revealed fresh capital commitments to two real estate strategies centred on Asia and one mega-fund with a global scope.
SWIB allocated $50 million each to Hong Kong-based Gaw Capital Partners’ Gateway Real Estate Fund VII and US firm Angelo Gordon’s AG Asia Realty Fund V, as well as $300 million to Blackstone Real Estate Partners X, according to board materials. SWIB chipped in an additional $50 million for a Gateway VII co-investment account.