Zhitong Financial App News, ESR (01821) announced that in order to comply with the group's capital cycle plan, the group aims to sell assets exceeding 1 billion yuan in 2023. On October 20, 2023, the group and BW contractors signed such joint venture deeds, which relate to the operation, management and administration of such joint venture companies for the development of such projects.
Each of these joint venture companies was an indirect subsidiary of the company prior to the conclusion of such joint venture deeds. After the NDV is completed, the NDV joint venture will be held by BW NDV Investor and ESR NDV Investor respectively; after NSHL is completed, the NSHL joint venture will be held 51% and 49% by BW NSHL Investor and ESR NSHL Investor respectively, and after the initial completion of YP, the YP joint venture will be held 49% and 51% by BW YP Investor and ESR YP Investor respectively. In each case, the joint venture company will no longer be recorded as its subsidiary in the company's consolidated financial statements.
After completion of NDV, completion of NSHL and initial completion of YP, the group and such joint venture company will enter into such management agreements with respect to the services to be provided to the joint venture group. These management agreements will allow the Group to increase its income as a leading real estate manager and service provider by utilizing its extensive experience in providing professional services in managing projects related to factories, warehouses and logistics facilities.
The director believes that entering into such a joint venture agreement to operate such joint venture companies through a joint venture with BW (a leading platform in Southeast Asia) can provide the group with a good opportunity to make good use of BW's market leadership position and strong development capabilities to implement three projects in Vietnam, which is a key market with strong growth fundamentals and good long-term growth prospects. The directors believe that the establishment of such joint venture deeds is in line with the Group's strategic development and business strategy to become the leading new economy real estate platform in the Asia-Pacific region. The sale of such joint venture companies under such joint venture deeds is also in line with the Group's capital circulation strategy, transferring assets on the balance sheet to investment instruments it has jointly invested in. Upon completion, the Group will continue to maintain indirect interests in these projects through its interests in these joint ventures.
According to reports, BW is the largest and fastest growing logistics/industrial new economy real estate platform in Southeast Asia, with an asset management scale of about 2.4 billion US dollars.