SK Holdings makes $333m strategic equity investment into ESR
SK Holdings Co., one of the largest South Korean conglomerates, and e-Shang Redwood, announced that the two companies have signed definitive agreements for SK to invest KRW 374 billion ($333 million) for a 10 percent fully diluted stake in ESR.
The transaction marks SK's first investment in the logistics real estate sector and its largest ever minority investment.
Upon closing, the transaction is expected to generate significant synergies between ESR and SK and will help ESR to further enhance its market leading position in the logistics real estate sector in South Korea and across the Asia-Pacific region.
Based in Seoul with 65 years of history, SK Group is one of the largest South Korean conglomerates with a specialty in oil & gas, telecommunications, semiconductor, petrochemicals and e-commerce businesses. As a responsible corporate citizen, SK is a national and global leader by taking active initiative in energy and chemicals, driving technological innovations in information, telecommunication, and semiconductor businesses, and enriching lives in the marketing and service sector including logistics and retail. Through its operations in over 30 countries, SK Group owns a sizable portfolio of warehouses, manufacturing plants, research centers and prime office properties.
The modern warehousing industry in Asia has witnessed robust development driven by the rapid growth of e-commerce and an increasing reliance on third-party logistics providers. According to JLL Research, e-commerce sales in China will represent more than 50 percent of global e-commerce sales by 2018 and China's online retail transaction value is expected to double from 2016 to 2029, exceeding US$1.5 trillion. E-commerce sales in Japan (the fourth-biggest market) are set on a similar growth trajectory and estimated to double in size to JPY 25.1 trillion ($226.1 billion) in 2020, at an annual CAGR of 12 percent. In South Korea, the modern warehousing industry has been one of the fastest growing sectors between 2000 to 2015 growing threefold to reach KRW 2.3 trillion ($2 billion) in 2015.