ESR Group Limited (“ESR” or the “Group”; SEHK Stock Code: 1821), APAC’s largest real asset manager powered by the New Economy, entered into an agreement with a strategic investor from Mainland China to sell a 30% stake in its Kwai Chung Cold Storage Logistics Centre development in Hong Kong. In 2022, ESR brought in Chinachem Group as an investor, which marked Chinachem Group’s first entry into logistics projects in Hong Kong. With this transaction, ESR will reduce to own a 40% stake in the facility while continuing to act as the investment, development and asset manager.

Expected to be completed in 2027, Kwai Chung Cold Storage Logistics Centre has a strategic location at the junction of Mei Ching Road and Container Port Road South, within Kwai Chung in the New Territories, easily accessible by established road networks to Hong Kong’s central business districts, international airport, and the border to Mainland China.

The facility is developed on a 55,245 square-metre site (with a new 50-year lease expiring in 2072), which ESR had won via a Hong Kong government land bid on 20 July 2022. Maximising the allowable Gross Floor Area (GFA) of 138,000 square metres, it will have seven storeys and two basement levels of carparks. In March 2023, ESR further secured approval to add 8 metres of height to the building which makes for high clear headroom. The facility will also provide ramp access to all levels and automated logistics features.

Jeffrey Shen and Stuart Gibson, ESR Group Co-founders and Co-CEOs, said: “We are pleased to bring on board a new investor and widen our partnership base. This being the first logistics development project in Hong Kong for our new investor is a strong testament to ESR’s capabilities to develop an exceptional product for Hong Kong’s new economy, driven by the rising e-commerce, imported food and pharmaceuticals sectors. In line with our focus on ESR’s asset-light strategy, the transaction will also enable us to accelerate capital recycling while continuing to earn fees as we scale up the new economy portfolio under our management across Asia Pacific.”

Chang Rui Hua, Managing Director, Business Management and Investment, ESR Hong Kong, said: “ESR’s Kwai Chung facility is poised to cater to the strong demand for large-scale, high-quality cold storage logistics space in Hong Kong. It will set a new benchmark in the industry not only with its cutting-edge features such as automation but also a range of green features as companies look for more sustainable solutions in all aspects of their supply chain.”

Kwai Chung Cold Storage Logistics Centre targets to achieve Green Building Certifications, such as LEED Core & Shell Platinum and BEAM Plus New Building Platinum. ESR also aims to obtain green financing for this project given its many sustainable features. 30% of the site area will be designated for greenery, including a rooftop garden and there will be a recycling irrigation water system for the landscape area. Electric Vehicle (EV) charging points will also be installed at the carpark.

As of 31 December 2022, ESR Group has a development work-in-progress (“WIP”) of US$11.9 billion, the largest development workbook in APAC. The Group achieved a record US$6.5 billion of development starts as well as US$5.5 billion in completions which accelerated in the second half of 2022. In Greater China, ESR has a total AUM of US$32.5 billion1 and approximately 14.3 million sqm of GFA