Posted inBusiness moves

ESR agrees sale of real estate funds business

ESR Group has entered into a share purchase agreement with an affiliate of Sumitomo Mitsui Finance and Leasing Co.
Stock photo showing a close-up view of row of blue, red, green, pink and yellow cardboard houses stood on stacks of coins. This is a family finances, real estate and holiday savings concept picture.

Real asset manager ESR Group has agreed to sell its ARA Private Funds business in Australia, Singapore, Korea and the US.

ESR Group said it had signed a share purchase agreement with an affiliate of Sumitomo Mitsui Finance and Leasing Co and real estate investment manager Kenedix for an enterprise value of $270m.

The transaction is subject to regulatory approval and is slated to close during the third quarter of this year.

The business being sold primarily consists of 22 funds which own assets in the real estate sector including office, retail and hospital and have assets under management of $9.8bn.

The sale is part of a planned $750m divestment overall from ARA Asset Management.

As part of the sale, Moses Song, who is currently serving as ARA CEO, will leave ESR to become CEO of ARAvest, the new holding company of ARA Private Funds.

“The transaction represents a key milestone in ESR’s stated strategy to streamline its business and double down on its new economy focus, which continues to be underpinned by high-growth industries like e-commerce, digital/AI and biopharma,” said Jeffrey Shen and Stuart Gibson, ESR Group co-founders and co-CEOs.

“These sectors are on the cutting edge of digitalisation, science and technology and they will continue to drive the demand for and investment in quality logistics, high-tech industrial, data centres and life sciences properties.”

Part of the Mark Allen Group.