News

ESR and ARA in $5.2bn in property fund merger

Two Asian firms are combining forces to form the third-largest listed real estate fund manager in the world. ESR Cayman, which is headquartered in Hong Kong, is set to acquire ARA Asset Management for US$5.2 billion. The transaction will see ESR acquire 100% of the share capital of ARA, which is considered to be the biggest property fund manager in Asia. As much as 90% of the acquisition will be paid for with stock while the remaining will be bought with cash. The combined entity will have US$129 billion of assets under management, $50 billion of which includes so-called “new economy real estate”, including data centres. ESR is a logistics specialist while ARA has its own new economy real estate platform. The opportunity to purchase this platform was a key driver in the move, according to ESR chairman, Jeffrey Perlman. Global investors with money to spend are buying new economy real estate which has benefitted from the rise in e-commerce and digital working. According to ESR, the acquisition will increase its new economy assets by 49%. The firm will also have a $7 billion war chest to spend on acquiring data centres and logistics hubs. © 2021 funds global asia

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