ESR subsidiary ARA has closed a $1 billion infrastructure fund with Export-Import Bank of China (Eximbank).
The China-ASEAN Investment Cooperation Fund1 II (CAF II) will invest in ASEAN countries across various infrastructure, energy resources including renewables, and ICT sub-sectors, with a ‘strong focus’ on sustainability and ESG standards.
ARA Private Fund’s infrastructure arm, ARA Infrastructure, has also been appointed as an investment adviser by the Export–Import Bank of China, the main anchor sponsor of the fund.
The Export-Import Bank of China, Gezhouba Group Overseas Investment Corporation, China Road & Bridge Corporation, and ARA have together committed US$1 billion to CAF II.
Jeffrey Shen and Stuart Gibson, ESR Co-founders and co-CEOs, said: “We are very proud of our ARA Infrastructure team for setting up the largest ASEAN-focused private infrastructure fund. We thank our partners and investors for their support and recognition of our Group’s sterling fund management expertise and track record as APAC’s largest real asset manager. Our move into the infrastructure and renewables business further strengthens our competitive edge as a fully integrated one-stop solution for our capital partners and customers. We are confident that the infrastructure fund is well-positioned to benefit from robust long-term macroeconomic trends in ASEAN including rising incomes, rapid urbanization, and favorable demographics. Alongside the focus on post-COVID economic recovery and growth, and various government investor-friendly policies to encourage infrastructure investment, the fund will contribute significantly to economic expansion and job creation across the region.”
ESR acquired ARA last year in a $5.2 billion deal. While both are traditionally predominately focused on logistics real estate, both have mode moves into the data center space. ESR is developing facilities in Japan, South Korea, and Hong Kong, and has partnered with Stack.
ARA has a data center footprint through its LOGOS Group subsidiary, which last year partnered with Pure Data Centres for a 20MW facility in Indonesia with plans for more across APAC.
Chen Bin, Vice President of the Export-Import Bank of China, said, “I’m very glad to see that with the strong support of government departments and the joint efforts of respective LPs, CAF II is now set up. We hope CAF II can help enhance connectivity, trade, and investment cooperation between China and ASEAN countries, so as to contribute to the economic cooperation and trade in the region.”
Founded in 1994, the Export–Import Bank of China acts as a financial arm of the government to implement state policies in industry, foreign trade, diplomacy, and the economy. Its loans have previously funded a data center in Cameroon.
Moses Song, the ARA CEO, said: “We are excited to have expanded into a new asset class and we have established a specialist infrastructure and renewables team, leveraging the resources across the Group, to steer the business as we continue to accelerate our growth in size, scale, and offerings. With the fund’s focus on essential infrastructure and renewable assets, we are delighted to play a part in helping to build connectivity, economic, trade, and investment cooperation in ASEAN, and to bridge any funding gap. In line with our focus on ESG, the fund will also adopt best-in-class sustainability practices and ESG standards to support the region’s energy transition and climate action.”
ESR is one of a number of logistics & warehouse industrial real estate firms looking to move into the data center space. The likes of Prologis, GLP, Segro, and others are also looking to develop facilities in the US, Europe, and the Asia Pacific.