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Weekly Snippet | A defining deal

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The rise of e-commerce, the boom in the technology sector, and the change in how we work have intensified the demand for logistics space in Hong Kong and Asia. Commenting on ESR’s acquisition of ARA Asset Management, Jason Fung of Valuation & Advisory Services discusses how he is seeing a shift in the way we view, interact and manage property in this week’s Weekly Snippet.

A seismic shift in the way we view property

Hong Kong-based logistics firm ESR Cayman announced last week it would acquire Singapore real estate fund manager ARA Asset Management, to the tune of US$5.2 billion. The news marks the creation of Asia Pacific’s most significant real estate and real asset manager and consequently the third largest listed real estate asset manager globally. 

The new enlarged ESR Group will incorporate ESR Cayman (whose headquarters are in Hong Kong), ARA Asset Management and the LOGOS Group (an Asia Pacifc real esate developer and fund manager owned by ARA).

The move cemented ESR’s commitment to what has been branded the new economy. It includes innovative logistics solutions and data centres. The merger will bring the total value of all assets under management to USD129 billion, of which the new economy contributes a substantial 39% - equal to roughly USD50.5 billion.

This is primarily expected to boost activity in these markets, with a considerable 1,200 Mega Watts worth of data centre developments already in the pipeline for the new group. These span eight major markets, including China, Japan, India and Singapore. 

Spurred on by the surge in e-commerce, the boom in the tech sector, and the evolving way we work, logistics is set to play a major role over the coming years. Dubbed by Jeffrey Perlman, ESR’s Chairman, as a “once-in-a-generation change in real estate”, the dominance of the cloud as a service, the tokenisation of real estate assets and a more agile workforce are changing the way we view properties. We also need to consider future-proofing and adaptability as critical factors in the asset’s value.

To #SeeWhatCouldBe and help you maximise the potential of your property, contact our expert Jason Fung.


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Jason Fung

Director

Valuation & Advisory Services

Hong Kong

Jason joined the Valuation and Advisory division of Colliers International in  2016 and is now acting as a Senior Associate Director of the division.  He has gained over 12 years of experience in the real estate field and specialises in valuation of a diverse range of properties in HK and China.

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