Warehouse builder and fund manager ESR has finished construction of the first phase of its Yokohama Sachiura Logistics Park, which is expected to be Japan’s most valuable complex of its type upon completion.

ESR Yokohama Sachiura Distribution Centre 1 is a four-storey, double-ramp warehouse with a gross floor area of 195,342 square metres (2.1 million square feet), the Hong Kong-listed company said Thursday in a release.

The four-phase logistics park will provide 720,000 square metres of logistics space and have a total completed value of $2.5 billion. The second phase began construction in June 2021 and is scheduled for completion in January 2023.

“ESR Yokohama Sachiura Logistics Park represents a milestone project for ESR, which demonstrates our team’s capability, innovation and prowess as APAC’s leading developer and manager,” said Stuart Gibson, co-founder and co-CEO of ESR.

Social Contribution

ESR Yokohama Sachiura DC 1 serves the Greater Tokyo market. Tenant demand in Yokohama remains strong, the company said, with DC 1 experiencing take-up in excess of 50 percent in a short period of time to major international and domestic customers.

Gibson underscored “the meaningful economic, environmental and social contributions” at the core of the project, which brought a neglected urban forest back to life to protect the natural habitat for a diverse mix of flora and fauna.

ESR said DC 1 features amenities including a lounge, a skydeck and a children’s day-care centre, as well as retail shops and female-friendly spaces. The perks are meant to help ESR’s clients attract and retain the talent they need — particularly working mothers — while addressing Japan’s shortage of labour and day-care centre space.

The distribution centre is equipped with a 5-megawatt rooftop solar power generation system, eco-friendly lighting and other energy-saving features. The facility has been awarded a number of sustainability credentials, including a Class A certification from CASBEE, Japan’s main standard for evaluating and rating the environmental performance of buildings.

Ken Sakuramoto, head of equity advisory for Japan at JLL, called ESR “a standout player” for the functionality and architectural aesthetics of its distribution centres.

“ESR has won several design accolades over recent years for its innovative approach to transforming industrial buildings into highly desirable workplaces and will no doubt be recognised for this latest development which will have wide appeal to its core e-commerce customer base as well as for the 3PL companies which support e-commerce,” Sakuramoto said.

Development Fund Stays Busy

Yokohama Sachiura Logistics Park is one of the seed assets of ESR’s Japan Logistics Fund III (RJLF3), a development joint venture with Dutch pension fund manager APG.

The partners announced last July that RJLF3 had raised JPY 150 billion ($1.35 billion) in committed capital, bringing the fund’s total investment capacity to JPY 470 billion. The JV was set up in 2019 with APG and an unnamed Asia-based sovereign wealth fund to focus on building large-scale logistics facilities in Japan’s key metro areas.

The fund’s projects under development include the ESR Ukishima Distribution Centre in Tokyo at an expected investment of JPY 24 billion, as well as the ESR Higashi Ogishima A Distribution Centre — at nine storeys, one of Japan’s tallest warehouse structures — near Haneda Airport.

The others are ESR Sachiura Distribution Centre in Tokyo, ESR Aisai Distribution Centre in Nagoya and ESR Fukuoka Asakura Distribution Centre in Fukuoka.

ESR is the third-largest listed real estate investment manager globally, with $140.2 billion in assets under management.