Hong Kong’s ESR Buyout of ARA Creates World’s Third-Largest Listed Real Estate Asset Manager

ESR, a Hong Kong-based logistics real estate firm, has agreed to buy 100% of ARA Asset Management, an Asia-Pacific real estate manager, for $5.2 billion in stock and cash, in a transaction that will create the world’s No. 3 listed real estate asset management company,

BY Realty Plus
Published - Friday, 06 Aug, 2021

Hong Kong’s ESR Buyout of ARA Creates World’s Third-Largest Listed Real Estate Asset Manager

ESR, a Hong Kong-based logistics real estate firm, has agreed to buy 100% of ARA Asset Management, an Asia-Pacific real estate manager, for $5.2 billion in stock and cash, in a transaction that will create the world’s No. 3 listed real estate asset management company, ESR said on 4th August. ESR, which went public at the Hong Kong Stock Exchange in 2019, will issue $4.7 billion of consideration shares and vendor loan notes shares. It will also pay $519 million in cash funded by a $250 million share placement to Sumitomo Mitsui Banking Corp. and $269 million in debt and internal resources. ESR's founders including billionaire executive director Shen Jinchu along with OMERS and JD.com represent 46% of its ownership and have provided irrevocable undertakings to vote in favor of the purchase. Other shareholders include GIC and funds associated with Warburg Pincus and Morgan Stanley. The transaction is subject to customary closing conditions including, amongst others, regulatory approvals,” ESR said. Closing is expected by the end of 2021 or first quarter 2022.