NDP Special Offer! Since May 2021, ESR REIT share price staged a rebound following acquisition of a 10% stake in ESR Australia Logistics Partnership (“EALP”), which is 80% owned by Singapore sovereign wealth fund, GIC. For a long time, I have been following developments of industrial S-REITs that are majority-owned by Temasek Holdings, such as Ascendas REIT and Mapletree Industrial REIT. The recent bullish form of ESR REIT share price led to an SG Wealth Builder member requesting for a coverage on this counter.
Singapore has two sovereign wealth funds – Temasek Holdings and GIC. While Temasek Holdings has stolen the limelight through its various investments in finance, industrial, technology and commodity firms, GIC tends to form partnerships with private equity firms to invest in overseas real estate assets. The recent aggressive moves by GIC to acquire industrial assets with ESR could have a major bearing on ESR REIT share price in the years to come.
Before touching on the outlook of ESR REIT share price, let’s cover some background on this industrial S-REIT. The sponsor of this S-REIT is ESR, which was formed in 2016 through the merger of Japan’s Redwood Group and Chinese e-Shang, co-founded by private equity firm Warburg Pincus in 2011. For this reason, ESR stands for e-Shang Redwood. ESR was listed in Hong Kong stock market in 2019 and GIC owns 5.06% stake as of 31 December 2020.
Local investors may not have heard of ESR REIT prior to 2017. This is because the sponsor (ESR) formed the S-REIT through a “back-door” approach. In January 2017, ESR acquired an 80% stake in the former Cambridge Industrial Trust, which was sold by National Australia Bank and Oxley Global. Following the acquisition, ESR rebranded Cambridge Industrial Trust to ESR REIT.
Usually, I am cautious of …Read more