SINGAPORE (Sept 8): ESR, the sponsor of ESR-REIT which was formerly known as Cambridge Industrial Trust, has formed a joint venture (JV) partnership with Invesco Real Estate (IRE) to acquire and manage a portfolio of Grade A stabilised logistics assets in China valued at approximately RMB2 billion ($401 million).

ESR is a pan-Asia logistics real estate developer, while IRE is the real estate investment management business of Invesco, an independent investment management firm listed on the New York Stock Exchange (NYSE).

In a joint release issued by the two companies on Friday, the companies say their partnership deal will see Invesco acquire a majority stake in the portfolio from ESR, while ESR will retain an equity interest and act as the project and property manager of the assets to drive future value for Invesco, in partnership with Invesco’s management team.

Both parties expect the transaction to close by late Oct this year.

This represents ESR’s first joint venture vehicle on stabilised assets in China, which the company believes will unlock meaningful value from its balance sheet as well as recycling capital for its future growth initiatives.

On the other hand, the transaction is said to mark Invesco’s first investment into China’s logistics real estate sector, allowing the company to further expand its core footprint in Asia.

“We are delighted to partner with Invesco on this landmark joint venture initiative.  Invesco’s global capabilities and reputation combined with ESR’s pan-Asia logistics expertise create a much stronger platform for our logistics real estate efforts in the region.  In addition to this China transaction, we see many other ways to cooperate across the region with the goal of creating long-term value for our shareholders and investors,” says Jeffrey Shen, co-CEO and co-founder of ESR.

As at 1.13pm, units in ESR-REIT are trading 0.9% higher at 56 cents.