CPP Investments, ESR double South Korean logistics JV to $1bn

Canada Pension Plan Investment Board (CPP Investments) and ESR Cayman are investing additional capital to double the size of their South Korean logistics investment venture to US£1bn (EUR839.5m). In August 2018, CPP Investments, which manages the C£476bn (EUR318bn) funds of the Canada Pension Plan, partnered with pan-Asian logistics specialist ESR and its Seoul-based subsidiary Kendall Square Asset Management to invest up to US£500m in South Korean logistics via a newly created Korea Income Joint Venture. CPP Investments and ESR said today they will upsize their investment in their Korea Income venture by a further US£500m, with the Canadian investor contributing the majority of the capital.

The new capital will fund further opportunities. The Korea Income venture’s portfolio, which is managed by ESR Kendall Square, consisted of 12 logistics facilities. Six of the 12 assets were divested to ESR Kendall Square’s Korea Logistics REIT in December last year.

Jimmy Phua, the head of Asia Real Estate at CPP Investments, said, “Korea is already one of the most developed e-commerce markets in Asia and the pandemic has accelerated the growth in the past year, further fuelling the demand for quality logistics facilities. “By expanding our successful joint venture with ESR, we are able to meet the fast-growing demand and strengthen our leadership position in the market, ultimately delivering long-term value for CPP contributors and beneficiaries.” Thomas Nam, CEO of ESR Kendall Square, said: “The upsize of the Korea Income JV is a reflection of the solid performance the vehicle has achieved in the past several years. The positive results demonstrate the strength of our investment strategy and asset management capability as well as the continued confidence of our long-standing capital partner, CPP Investments.”

CPP Investments and ESR have collaborated on two other joint ventures focused on the Korean logistics sector since 2015.

To read the digital edition of the latest IPE Real Assets magazine click here.