(June 5): ESR Cayman, a logistics real estate developer, is seeking to raise as much as US$1.24 billion ($1.7 billion) in a Hong Kong initial public offering.

The company and some shareholders, including Warburg Pincus and Goldman Sachs Investments Holdings (Asia), are selling 560.7 million shares at HK$16.2 to HK$17.4 ($2.8 to $3) apiece, according to terms for the deal obtained by Bloomberg. The price range represents a market capitalisation of US$5.6 billion to US$6 billion, the terms show.

At US$1.24 billion, ESR’s share sale would be the biggest in Hong Kong this year, surpassing Chinese brokerage Shenwan Hongyuan Group Co’s US$1.16 billion April listing, according to data compiled by Bloomberg.

Fundraising in the city is expected to heat up in the second half of 2019. Chinese tech giant Alibaba Group Holdings is considering raising US$20 billion via a second listing in Hong Kong, while Anheuser-Busch InBev NV is targeting an IPO of its Asia Pacific operations that could raise at least US$5 billion, people familiar with the matter have said.

The rapid growth of e-commerce in Asia Pacific, fuelled by local players such as Alibaba, has boosted demand for logistics warehouse systems. ESR is raising capital as it continues to expand in the region. It bought a majority stake in Singapore’s Sabana Investment Partners. after pledging to invest more than US$1 billion in a logistics park in the southern part of Yokohama in Japan.

APG Asset Management, General Electric Pension Trust and JD.com Inc.’s Jingdong Logistics Group Co. are also among the seven holders selling shares in the IPO. The company aims to price the offering on June 12 before starting trading June 20, the terms show.

ESR managed 152 properties across China, Japan, South Korea, Singapore and India as of the end of 2018, according to its prospectus. Deutsche Bank AG and CLSA Ltd. are joint sponsors for the offering.

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