ESR Group, a Hong Kong-based real estate and logistics firm, has announced plans to raise approximately 2.10 billion yuan (289.24 million dollars) by spinning off and listing its Jiangsu Friend logistics projects on the Shanghai Stock Exchange. The assets will be offered as a Real Estate Investment Trust (REIT), with units priced at 2.628 yuan each. ESR will retain an ownership stake of at least 39.37 percent in the newly listed entity. This move is part of ESR's broader strategy to monetise its logistics assets, raise funds, and support the continued expansion of its logistics and real estate portfolio.
ESR Group, a Hong Kong-based real estate and logistics investment firm, proposed in December 2022 to spin off and separately list some of its logistics assets. These assets were to be listed on the Shanghai Stock Exchange as part of a publicly traded infrastructure securities investment fund, also known as a Real Estate Investment Trust (REIT).
Last week, ESR announced that it will raise approximately 2.10 billion yuan (289.24 million dollars) through the spin-off and listing of its Jiangsu Friend logistics projects. The offering price for the REIT units has been set at 2.628 yuan per unit.
The logistics assets included in the listing comprise three projects located in Jiangsu Province, currently owned by ESR through its subsidiary, Jiangsu Friend Warehouse. Once the listing is completed, ESR will retain an ownership stake of at least 39.37 percent and up to 41.42 percent in the newly listed entity. This announcement follows ESR's receipt of a buyout proposal earlier this month. A consortium has offered to take the company private for 55.19 billion Hong Kong dollars (7.10 billion dollars), indicating growing interest in ESR's assets and operations.
The spin-off is part of ESR's broader efforts to monetise its logistics assets while still participating in their growth. By adopting the REIT structure, the company enables investors to earn income from these projects while retaining partial ownership. The funds raised from this listing will also support ESR's plans to further expand its logistics and real estate portfolio. This approach demonstrates ESR's commitment to unlocking the value of its logistics assets while positioning itself for future expansion in the rapidly growing sector.
ESR Group's spin-off and listing of its Jiangsu Friend logistics projects mark a strategic step in capitalising on the booming demand for logistics infrastructure in China. By adopting the REIT model, the company unlocks the value of its assets while providing steady income opportunities for investors. The move also strengthens ESR's financial position, enabling it to pursue further expansion in the real estate and logistics sectors. As the company navigates a buyout proposal alongside this listing, its focus on growth and value creation highlights its adaptability in a competitive market.
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