Hong Kong-based warehouse developer, ERS Cayman has announced that it is building a $1.5 billion logistics park in Osaka, Japan, within a few years to fulfil the growing demand of logistics companies and other e-commerce players in the industry. Cayman is a company supported by investors including Singapore tycoon John Lim and Warburg Pincus.
The ESR Kawanishi Distribution site will be constructed and developed in two phases as it is being built on a site that covers an area of more than 500,000 square meters in the city of Kawanishi, which is about 5 km in the north of Osaka Itami Airport. In the first phase, two six-story blocks will be made along with a combined gross floor area covering almost 200,000 square meters. This portion is expected to be completed by the end of the year 2024. The second phase of development will take place from 2025 onwards and will comprise two additional buildings to be constructed.
The warehousing project will cater for the ongoing and growing demand for large-scale and advanced logistics areas in greater Osaka.
The co-founder and co-CEO of ESR Cayman, Stuart Gibson has said in a statement that the project is an extensive master plan that will help to cater for the ongoing and growing demand for large-scale and advanced logistics areas in greater Osaka. It will also allow the area to substantiate the company’s lead position in the logistics industry globally. He also added that the development of this project will also help to discharge the full potential value of the space and provide an advantage in the long-term development of the area as well as the industry.
Pointing to the data from Cushman & Wakefield, which are the property consultants, the city of Osaka is considered one of the fastest-growing logistics markets in Japan, with a 1% of vacancy rate of the warehouses in the area, which is the lowest in the area since 2017. The increasing investments by the companies and rise in e-commerce have interested the companies to digitize the supply chains and automate their logistics operations, which are the reason behind the increased demand for warehouses in the country.
To deal with the increasing demand of the industry, ESR Cayman completed the acquisition of ARA Asset Management in January, which is a Singapore based company, with a great deal which was helpful in the transformation of the company to become the largest real estate management platform of Asia. The assets of the company value over $140 billion under the management and has been making up on the facilities provided in the business of logistics and several other economic assets in the region.
Stuart Gibson is the co-founder and co-CEO of ESR Cayman.
With shareholding partners counting JD.com, which is the Chinese e-commerce company and billionaire of Singapore Chew Gek Khim, ESR was considered to be one of the most active participants of property investments in the year 2021. The company has been able to bag deals with over $10 billion of value in the last year including the purchase of a warehouse across Australia for A$3.8 billion from Blackstone. According to JLL’s report last month, the global investors have poured the capital of $48 billion, which is the highest record into the logistics investments this year, in comparison with the $32 billion in the year 2020.