Hillhouse Identified as Buyer of $232M ESR-Logos REIT Singapore Portfolio

Hillhouse Capital has made its first major industrial buy in Singapore with Mingtiandi now able to identify the Chinese private equity major as the buyer of a set of five industrial facilities in the city-state sold by ESR-Logos REIT last month.

The Hillhouse real estate team, which is led by former ESR director Joe Gagnon, has been identified by sources familiar with the deal as the purchaser which agreed to pay S$313.5 million ($232 million) to acquire the shed portfolio from the SGX-listed trust.

The deal, which was announced to the Singapore bourse on 23 June, marks the largest direct real estate investment by Hillhouse to be made public since the firm reached a final close on over $2 billion in equity for its first Asia real estate fund in August of last year. Hillhouse representatives declined to comment on the transaction when contacted by Mingtiandi.

The five-asset transaction is being accomplished through a set of put and call option agreements involving special purpose vehicles represented by the Singapore arm of Amsterdam-based trust management company Intertrust Group, with ESR-Logos REIT having also agreed to sell two other assets last month via separate deals as it rejigs its portfolio.

Sweet Singapore Sheds

The Singapore acquisitions are set to give Hillhouse ownership of a total of 173,783 square metres (1.87 million square feet) of warehouse space in the Lion City, and were purchased at a 5.1 percent discount from the portfolio’s book value of S$330.4 million.

Spread across the western and eastern regions of Singapore, Hillhouse’s five target assets include 3 Pioneer Sector 3 in western Singapore’s Tuas district, a 66,566 square metre industrial campus which it is buying for S$95 million.

Also in the set is a 5-storey warehouse at 6 Chin Bee Avenue in Taman Jurong worth S$93 million, a pair of three-storey warehouses at 4 and 6 Clementi Loop (S$37.6 million) and an eight-level warehouse at 30 Toh Guan Road valued at S$57.8 million.

The final property is the Pan Asia Logistic Centre at 21 Changi North Way in Tenah Merah district which Hillhouse is acquiring for S$30.1 million.

The transactions, which are understood to have been brokered by CBRE, are expected to be completed this year. The property consultancy declined to comment on the transactions and ESR-Logos REIT representatives had not yet responded to inquiries from Mingtiandi by the time of publication.

Logistics in Focus

Led by mainland mega-investor Zhang Lei and known for being an early backer of Chinese tech giants like Tencent and JD.com, Hillhouse has been keeping a low profile in the property world since wrapping up fund raising for its Real Asset Opportunities Fund last year.

With its property strategy focused on investing in new economy-related property assets and platforms across Asia Pacific, Hillhouse, along with Warburg Pincus, in 2021 led an investor consortium which committed around $700 million to boost JD Property, the property management arm of JD.com, with the mainland e-commerce giant having since announced plans for a Hong Kong IPO for the company.

Hillhouse was founded by former Yale investment officer Zhang Lei in 2005 and had over $100 billion in assets under management at the end of 2021. The company made logistics a major focus of its first real estate fund and had been actively investing in the sector before the development of its dedicated property strategy.

In 2017, Hillhouse was part of a Chinese consortium that privatised GLP for $11.6 billion. The following year, it joined Tencent, China Life, ICBC International and other mainland giants in pouring $2.5 billion into JD Logistics before that company’s $3.2 billion 2021 IPO.

Hillhouse consolidated a pair of Singapore offices into a single location in the Marina Bay Financial Centre late last year, according to reports at the time, with Gagnon said to now be based in the city after years in Hong Kong and mainland China.