Warburg-backed ESR weighs sale of some China assets: sources

The logistics and industrial property investor plans to appoint advisers to help it review options for the sale

Singapore-headquartered ESR Group - the sponsor for ESR Reit - is considering selling some of its assets in China, either individually or as a portfolio, to concentrate on other markets, according to people familiar with the situation.

The Asia-Pacific focused logistics and industrial properties investor plans to appoint advisers to help it review options for the sale of the assets, potentially for a few billion US dollars, the people said, asking not to be identified discussing private information.

Despite the potential disposals, the company remains interested in China, where it is actively exploring new growth and investment opportunities, one of the people said.

ESR generated about 27 per cent of its revenue from Greater China in 2024. Another 25 per cent came from Australia and New Zealand and 22 per cent from South-east Asia, its annual report shows.

The US$30 billion of Greater China assets it manages include logistics parks around the mainland, a data centre in Hong Kong, malls and offices in Shanghai, as well as a life sciences facility, its website shows. ESR also has real estate assets throughout Asia and a presence in Europe.

In June, a consortium including Starwood Capital Group, Sixth Street Partners, SSW Partners, Warburg Pincus, Qatar Investment Authority and ESR’s founders approved a buyout of the firm for about US$7 billion.

ESR is headquartered in Singapore following its delisting from the Hong Kong stock exchange in July.

Deliberations on the China assets are preliminary and may not lead to a sale, the people said.

ESR did not respond to requests for comment.

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In the past 15 years, foreign property buyers have invested close to US$140 billion in Chinese real estate such as offices, warehouses, shopping malls and data centres, and many are now seeking to exit as the market wobbles. BLOOMBERG

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