ESR receives approval from HKSE for proposed spin-off and potential listing of logistics assets through a C-REIT on the Shanghai Stock Exchange

HONG-KONG, March 6, 2023 /PRNewswire/ — ESR Group Limited (“ESR” or the “Group”; SEHK Stock Code: 1821), APAC’s largest real asset manager driven by the new economy, has received confirmation from the Stock Exchange of Hong Kong Limited (“HKSE “) that the Group can proceed with the proposed transaction on the spin-off of the three high-value logistics projects in Kunshan, province of Jiangsuthe PRC, currently wholly owned by the Group through Jiangsu Friend Warehouse Co., Ltd. (the “Seed Portfolio”), and their potential listing through a publicly offered infrastructure securities investment fund (“C-REIT”) on the Shanghai Stock Stock Exchange.

Following the recent confirmation from the HKSE, ESR will continue to seek approvals from the relevant regulatory authorities, including but not limited to the National Development and Reform Commission (the “NDRC”), the China Securities Regulatory Commission (the “CSRC”) and the Shanghai Stock Exchange, in connection with the proposed transaction. As of the date of this announcement, the terms and schedule of the proposed transaction are not final.

The Seed Portfolio consists of three logistics projects with best-in-class specifications and design, strategically located in prominent hubs of the country’s last mile logistics networks and have a total area of ​​more than 427,000 m². Jiangsu Friend Phase I is a fully leased, stabilized property with a gross floor area (“GFA”) of over 135,000 m². Jiangsu Friend Phase II has more than 85,000 m² GFA and Jiangsu Friend Phase III has the largest area of ​​the three phases with a total GFA of over 206,000 m². The three assets have stabilized since 2018.

Stuart Gibson And Jeffrey SchenESR Group co-founders and co-CEOs stated, “We are pleased to receive HKSE approval for ESR to proceed with this proposed C-REIT transaction. As the lead manager of REITs in APAC, we strongly believe in the continued financialization of real estate in APAC and especially in China. The proposed transaction is also a testament to ESR’s focus on accelerating our asset-light strategy. By injecting our assets into private funds and REITs, we continue to increase our fund management fee income while recycling capital into attractive opportunities across APAC to further build long-term sustainable growth We are pleased that our proposed transaction is consistent with the Chinese government’s support for securitization of infrastructure projects and we are confident that the proposed transaction will strengthen our market leadership and openness a new and exciting growth engine v into the Group China.”

Based on UBS’s recent analysis, the C-REIT market could well be rising 1.2 trillion dollars in market capitalization by 2030 as China could securitize just 2 percent of its infrastructure assets (which are valued at 60 trillion dollars)^[i].

Chang Rui HuaManaging Director and Group Head of Capital Markets and Investor Relations: “Into the fast-growing C-REIT market China is propelled by many of the secular trends supporting ESR growth and offers investors another opportunity to enhance and diversify their portfolios. ESR has a strong track record of managing many successful REITs across geographies and asset classes. Our proposed C-REIT will benefit from accelerating e-commerce growth and continued supply chain resilience, driving demand for modern logistics facilities. In addition, China’s local government’s focus on growing leading industries, including e-commerce, digital economy, intelligent equipment manufacturing and life sciences, will all require high-quality logistics and industrial space.”

ESR has total assets under management of 32 billion dollars and approximately 13.9 million m² GFA China as of June 30, 2022.

About ESR

ESR is APAC’s largest real estate manager driven by the new economy and the third largest publicly traded real estate manager in the world. With more than 140 billion dollars in total assets under management (AUM), our fully integrated development and investment management platform spans key APAC markets including China, Japan, South Korea, Australia, Singapore, India, New Zealand And South East Asiaaccounting for more than 95% of GDP in APAC, and also includes a growing presence in Europe and the US We offer a broad range of real estate investment solutions and new economy real estate development opportunities in our private funds business, enabling capital partners and clients to take advantage of key secular trends in APAC. ESR is the largest sponsor and manager of REITs in APAC with total assets under management of 45 billion dollars. Our Purpose Space and Investment Solutions for a Sustainable Future drives us to manage sustainably and impactfully and we consider the environment and the communities in which we operate to be key stakeholders of our business. Listed on the main board of the stock exchange of Hong-Kong, ESR is a component of the FTSE Global Equity Index Series (Large Cap), Hang Seng Composite Index and MSCI Hong Kong Index. More information can be found at www.esr.com.