Baker McKenzie has advised APG and the Canada Pension Plan Investment Board (“CPP Investments”) on the establishment of a USD 1 billion joint venture (“ESR-KS II”) with ESR Cayman Limited (“ESR”) that will invest in and develop a portfolio of institutional-grade industrial and warehouse logistics assets in the Seoul and Busan metropolitan areas in South Korea (the "Joint Venture"). This transaction represents one of the largest global logistics real estate capital raisings to date this year.
APG, CPP Investments and ESR have agreed to initial investments in the Joint Venture in the amounts of USD 350 million, USD 450 million and USD 200 million, and will hold 35%, 45% and 20%, respectively, of the total issued shares of the Joint Venture. The three companies have allocation expansion options that could bring the total equity investment capacity to as much as USD 2 billion over time. The transaction is expected to be completed before July 2020, subject to relevant regulatory approvals.
The Joint Venture marks APG’s fourth development collaboration with ESR, and CPP Investments’ third joint venture with ESR. ESR-KS II is a successor vehicle to a USD 1 billion joint venture between the three companies that has led to the development of 17 projects totalling 2.2 million sq.m. of GFA in South Korea. The maiden vehicle was later upsized to USD 1.15 billion.
Baker McKenzie fielded a top transactional team led by Edwin Wong and supported by Hayley Irons. Stephen Crosswell and Donald Pan of Baker McKenzie and Guoquan Wen of Fenxun Partners also provided competition law support.
Commenting on the deal, Edwin Wong said: "We are very pleased to have assisted our longstanding clients on this exciting new venture and look forward to continuing to support APG and CPP Investments as they establish other partnerships and seek other investment opportunities across the Asia Pacific region."
Baker McKenzie has advised both CPP Investments and APG on a number of significant transactions over the years. Most recently, acting for CPP Investments in connection with its cornerstone investment in GLP’s largest ever Japan-focused logistics real estate fund, and acting for APG on its investments in Greystar’s China rental housing platform and Greystar's Australian multifamily fund to develop a build-to-rent-project in South Yarra.