ESR buys biotech facility in Shanghai’s Zhangjiang

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ESR has acquired the two-building campus from mainland developer Yango

ESR has acquired a business park in Shanghai’s biotech cluster known as Zhangjiang Pharma Valley, marking the industrial specialist’s first-ever life sciences asset.

Hong Kong-listed ESR bought the two-building campus from mainland developer Yango for an undisclosed price earlier this month in partnership with Elixir, a biotech real estate company founded by former JLL executive Jim Yip. .

The ACGT park has a gross area of ​​8,940 square meters (96,229 square feet) and includes two four- to five-story laboratory buildings separated by a large open garden, Yip told Mingtiandi on Thursday. The facilities are leased to eight biotech tenants, including Shanghai-based companies Antengene and GenFleet Therapeutics.

“Life science properties have recently become a hot investment asset class in China, with a slew of investors like Gaw Capital, Warburg Pincus, APG, CBC, Hillhouse and Sequoia announcing deals or raised new funds to target the sector,” said Yip, who served as JLL’s head of capital markets for China before launching Elixir last year.

Step acquisition

ESR confirmed to Mingtiandi that the acquisition of ACGT Park is a “major step” for the company, as it makes a strategic entry into life sciences real estate in an effort to capture growing demand in the industry. Chinese biopharmaceutical.

Jim Yip, founder of Elixir

The campus located at 103 Cailun Road in Zhangjiang High-Tech Park in Shanghai’s Pudong District is part of Zhangjiang Pharma Valley Phase II, a 1.5 square kilometer (0.6 square mile) biomedical center with over 300 companies and 30 R&D centers and regional headquarters. Pharmaceutical giants Novartis, Roche, Pfizer and AstraZeneca have established development bases in the region.

Formerly called Zhangjiang Neo, ACGT Park is being renamed to modernize buildings dating back to 2011, Yip said.

Shenzhen-listed Yango Group said in a recent estimate that it expects to report a loss of between RMB 3.5 billion and 4.5 billion for the first half of the year. In February, the developer defaulted on $657 million of offshore bonds, then sued in March by failing to repay RMB 600 million (then $94.62 million) in principal and interest for a domestic bond in China.

Yango has yet to make a statement on handing over ownership of Zhangjiang Hi-Tech Park, a popular industrial hub in eastern Shanghai.

A longtime broker at JLL and Cushman & Wakefield, Yip describes Elixir as an investment and management platform focused on providing innovative laboratory and R&D space and cutting-edge services for biotech companies in China.

“ESR and Elixir have both expressed strong commitment to this embryonic industry and will be making further acquisitions,” he said.

healthy interest

JLL reported that 26% of leased office space in the Shanghai market in 2021 came from life sciences companies – double the 13% figure achieved in 2020 – and institutional investors have taken notice.

Dutch pension fund manager APG teamed up with Singaporean investment firm CBC Group last year to launch a $1.5 billion venture targeting the life sciences real estate segment in Asia-Pacific. The cooperation includes setting up a platform to develop and manage new healthcare projects in the region, starting with 1 million square meters of facilities in Shanghai.

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In April this year, Chinese developer DNE Group announced a joint venture with a global institutional investor to pursue opportunities in life science parks located in leading cities in China, with an expected total investment of $1.2 billion. The JV’s seed project is a life science park owned and operated by DNE in Shanghai’s Zhangjiang Science City cluster.

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