Hong Kong-listed real estate giant ESR has partnered with Indonesia Investment Authority (INA), and MC Urban Development Indonesia (MCUDI) to invest in modern warehouse facilities in Indonesia, according to a statement.
The joint venture will initially invest in three modern logistics parks that are developed and managed by ESR in the country, with plans to explore investment opportunities in the sector. The three logistics parks are situated in Cikarang and Karawang.
The Cikarang assets – Cikarang I Logistics Park and Cikarang II Logistics Park – are expected to be completed in mid-2023, while construction of the Karawang asset – Karawang I Logistics Park – is set to begin in June 2023.
This partnership represents INA’s first foray into the real estate asset class and MCUDI’s debut in logistics development in Indonesia. MCUDI is a 100% subsidiary of Mitsubishi Corporation engaged in real estate development.
The demand for modern warehouse facilities in Indonesia is driven by key sectors – e-commerce, third-party logistics (3PL), and the automotive industries. These sectors contribute significantly to the market’s growth, each with unique requirements and demands for storage and distribution spaces, according to the announcement.
At present, the Indonesian warehouse market, stands at around 29 million sqm, with modern warehouses only accounting for approximately 8% of the total market.
“Our strategic partnership with ESR and MCUDI not only aims to meet the evolving needs of the logistics industry but also reflects INA’s commitment to sustainable development and economic growth,” said INA’s CEO Ridha Wirakusumah.
INA is Indonesia’s sovereign wealth fund mandated to increase investment to support the country’s sustainable development and build wealth for its future generations.
Stuart Gibson, ESR Group co-founder and co-CEO, emphasised the partnership’s commitment to Indonesia, a key market in ESR’s expansion strategy for the fast-growing Southeast Asia region.
“Underpinned by a surging consumer class, the exponential growth of e-commerce, and the Indonesian Government’s push for electric vehicles, there is robust demand for high-quality logistics and industrial spaces in the country from both multi-national and domestic customers,” Gibson said.
ESR is the largest real asset manager in the Asia-Pacific region and the third-largest listed real estate investment management globally.
With approximately $150 billion in total assets under management (AUM), its fully integrated development and investment management platform extends across the key APAC markets, including China, Japan, South Korea, Australia, Singapore, India, and New Zealand.
