BBA 2022 Winner Profile: Company of the Year – ESR

Real asset investment solution provider and real estate developer ESR Group Limited has been crowned Company of the Year at the British Chamber of Commerce in Japan’s 2022 British Business Awards (BBA).

In the past 12 months, ESR has gone from strength to strength, increasing not only its size but also its impact and ambition. A panel of esteemed judges from the worlds of business, government, academia, media and sport therefore recognised the firm at the November gala event, held annually to celebrate British business excellence and foster greater bilateral ties between the UK and Japan.

In January 2022, following the acquisition of ARA Asset Management, ESR became the largest real asset manager in the Asia Pacific and the third-largest real estate investment manager globally.

With US$ 140 billion in total assets under management, the firm’s fully integrated development and investment management platform now extends across key APAC markets including Japan, China, South Korea, Singapore, India, Australia and New Zealand.

The firm also became the largest sponsor and manager of REITs in the Asia Pacific, with 14 listed REITs across the Group.

At the time, ESR said the transaction “uniquely positions” the Group to capitalise on the largest trends in APAC, including “the continued rise of e-commerce, an accelerating digital transformation and the financialization of real estate.”

The firm has been focused on providing “space and investment solutions for a sustainable future” since its formation in 2016 following a merger between e-Shang and the Redwood Group to form e-Shang Redwood (ESR). And its aim is to continue “to manage sustainably and impactfully” while considering the environment and communities in which it operates as “key stakeholders” of its business.

 

New markets 

While ESR’s main area of business is designing, building and leasing distribution centres for firms such as Amazon, Rakuten and Alibaba, in recent years it has pursued a number of adjacent opportunities related to its existing solutions.

In 2021, the firm expanded into data centre development, setting up facilities in major data centre clusters across Asia, including Osaka, Tokyo, Seoul, Hong Kong and Singapore, which deliver more than 300 megawatts of IT load.

It was a natural move, according to Stuart Gibson, co-founder and co-CEO of ESR, as many of ESR’s tenants have huge cloud businesses, meaning they require support not only in storing physical goods but digital assets, too.

And, given the amount of energy required to power and cool the servers at data centres, the next addition to ESR’s growing portfolio was renewable energy generation, in 2022.

As part of an integrated energy system, solar panels on many of ESR’s warehouses generate energy, which is consumed by the tenants. The remaining energy is stored in giant on-site batteries to be used when needed or pumped back into the grid system.

Long-term, the idea is “to get all our warehouses off the grid,” said Gibson, adding that ESR’s goal is to have carbon-neutral operations.

In July, the firm became the first real asset manager to partner with Enerbank, a major green certificate operator in Japan, to participate in the Green Energy Certificate system. Through this system, solar power generated from ESR’s facilities is recognised as a renewable energy source that is fed into the power grid in Japan, thereby providing companies and communities with “green” energy.

Due to its rapidly diversifying portfolio, ESR is considered a leader in the “new economy,” defined as cutting-edge, high-growth industries that are a driving force of economic growth.

 

Supporting people, communities

A strong advocate of using human-centric design to “put people first,” Gibson began rolling out onsite childcare facilities, high-quality recreation spaces and green initiatives at ESR’s Japan distribution centres from the firm’s early days.

“Everywhere you go, the operational part of warehouses looks much the same, but we stand out from others for our human-centric part,” he said, adding that initiatives that support workers help tenants attract and retain staff while allowing ESR to give back to the community.

Indeed, in 2018, the firm scooped a BBA in the category of Social/Environmental Contribution for its positive impact on staff, stakeholders and local areas.

Since then, ESR has achieved significant progress towards accelerating its ESG (environmental, social and governance) efforts across multiple fronts, including sustainable financing, green building certifications and community engagement.

Today its Japanese warehouses are home to all kinds of state-of-the-art features including wellness centres to support physical and mental health, 10-pin bowling alleys and corporate suites where tenants can hold meetings or other events. There are even on-site occupational health practitioners for workers, thereby improving access to specialist health care.

What Gibson is most proud of, though, are the baby care centres, or Barnklübbs, where young children receive warm meals, disposables such as nappies and educational toys for playtime—all for no charge.

Both inside the company and within the countries it operates, ESR is also striving for diversity, equity and inclusion by introducing projects tailored to the needs in each part of the Group.

In China, the Group is establishing libraries in rural areas to encourage the levelling up of education across genders. Each resource is stocked with books and audio-visual equipment. In India, where girls typically complete only primary education, the Group is supporting them financially to continue their education into secondary school and beyond.

In its Japan office, meanwhile, ESR is striving to achieve the same balanced ratio of women in senior management as it has in Australia, Singapore and China. In 2022, more female non-executive directors joined the board, and Tokyo staff were financially supported to pursue qualifications, such as a part-time MBA, to aid their professional development.

 

Future plans

With more builds scheduled—for both the legacy business and its adjacencies—ESR is poised for further growth in 2023 and continues to look for business opportunities.

“You can’t stand still in this business. My job is to constantly figure out what’s next, to see what’s coming over the horizon,” said Gibson.

And based on the positive impact of winning a BBA in 2018, he has high hopes that this year’s gong will also give the firm a much-deserved boost.

“The British chamber of commerce carries a lot of prestige all over APAC,” he said, adding that the win “means a lot to the whole team.”