Warburg Pincus-Backed ESR To Build Maiden Logistics Hub In Hong Kong After Winning Land Auction

ESR Cayman won the auction for an industrial site near Hong Kong’s Kwai Chung container port, paving the way for its maiden logistics hub in the city as the Warburg Pincus-backed warehouse developer continues to amass an extensive portfolio of the physical assets that power Asia’s booming digital economy.

The Hong Kong-listed company—which also counts Chinese e-commerce giant JD.com, Singapore tycoon John Lim and billionaire Chew Gek Khim’s Straits Trading as major shareholders—offered to buy the Kwai Chung site for HK$5.26 billion ($688 million). ESR beat other bidders including Australia’s Goodman and Mapletree Investments, part of Singapore’s state-linked investment firm Temasek, according to Hong Kong’s Lands Department.

“The acquisition will provide strategic value to the group given the high profile and prime location of the site, enhancing the group’s strategic position in a key global gateway logistics market,” ESR said in a separate regulatory filing to the Stock Exchange of Hong Kong.

Located less than one kilometer from Kwai Chung Container Terminal 7, which is among the world’s busiest ports, the 55,245 square meter site, can be developed into a multi-story logistics hub with a gross floor area of 138,000 square meters, according to the Lands Department. The project could be worth as much as HK$11 billion, real estate website Mingtiangdi reported, citing industry sources.

The Kwai Chung project will be the first logistics facility to be built by ESR in Hong Kong. The warehouse developer—which took over Singapore real estate giant ARA Asset Management in January—is converting another industrial site in the area into a data center.

ESR has been building a strong base of the physical infrastructure that supports Asia’s booming e-commerce and digital industries—in the form of data centers, logistic hubs and warehouses. It has built and acquired logistics assets across the region in recent years to meet growing demand from e-commerce giants Amazon, Alibaba, Coupang and JD.com. ESR has over $140 billion of assets under management across Australia, China, India, Japan, South Korea, Singapore and Southeast Asia.