Blackstone Takes Majority Interest in South Korea’s Sanha Logistics Park II

Blackstone has taken a majority interest in Sanha Logistics Park II, a large dry-storage development under construction in South Korea’s Seoul Metropolitan Area, adding another logistics asset to the firm’s growing Korean real estate exposure. ESR will remain an investor and will continue to oversee development and asset management through ESR Kendall Square, its South Korean platform.

Funds managed by Blackstone Real Estate Partners made the investment through a primary share issuance. The companies did not disclose Blackstone’s exact ownership percentage or the value of its stake. ESR told Reuters that the total development cost is approximately 600 billion won, about $448 million at the exchange rate used in the report, while Blackstone did not specify how much capital it invested for the majority interest.

Sanha Logistics Park II spans 334,000 square meters and is expected to be completed in 2028, according to the companies’ joint announcement. The project is positioned along the Gyeongbu Expressway, the main highway corridor connecting Seoul and Busan, within an established distribution and manufacturing hub. It is being designed with significant power capacity to support advanced warehouse automation and the supply-chain requirements of third-party logistics providers, e-commerce platforms and retailers.

A primary share issuance keeps ESR involved

The structure is important because this is not an announced full exit by ESR. A primary share issuance creates new equity in the project entity, and ESR is retaining an ownership position while Blackstone becomes the majority investor. ESR Kendall Square will also stay in place as development manager and asset manager, leaving the group responsible for the project’s execution as construction continues.

Neither company disclosed how far above 50% Blackstone’s interest sits, and the announcement did not provide details on debt financing, expected investment returns or the project’s eventual stabilized value. It also did not identify committed tenants. Those omissions limit what can be inferred from the headline ownership change: Blackstone has secured control through a majority equity position, but the financial terms and leasing profile remain largely private.

The investment still adds to a visible build-out by Blackstone in South Korea. The companies said Sanha Logistics Park II is Blackstone’s third logistics investment in the country and its fifth investment announcement across businesses there in the past 14 months. Chris Kim, head of Blackstone Real Estate in Korea, described logistics as one of the firm’s highest-conviction real estate themes and pointed to South Korea’s e-commerce, advanced manufacturing and AI-related industries as demand drivers.

Power capacity and highway access shape the leasing case

For Sanha Logistics Park II, the investment thesis presented by the companies centers on scale, location and the technical requirements of modern warehousing. At 334,000 square meters, the development is being built to serve large logistics users rather than small local storage needs. Its position along the Gyeongbu Expressway connects it to the country’s principal Seoul-Busan road corridor and places the facility within an area already used for distribution and manufacturing.

The power component is also material to the project’s design. Warehouse automation can require substantial electrical capacity for conveyor systems, sorting equipment, robotics and other mechanized handling infrastructure. ESR and Blackstone said the facility is intended to support those systems as logistics customers automate more of their operations. They specifically identified third-party logistics providers, e-commerce platforms and retailers as prospective user groups, but did not announce any leases or pre-commitments.

Sanha Logistics Park II is therefore still a development-stage asset rather than a completed, stabilized warehouse property. Construction is underway and the target completion year is 2028. Until then, the project remains exposed to execution issues such as construction timing, final costs and the pace at which space is leased. The announced 600 billion won development cost reported by Reuters provides a sense of the project’s scale, but it does not reveal Blackstone’s equity check, the capital structure or the valuation attached to its majority position.

Logistics remains a major Blackstone real estate theme

The South Korean investment fits a much broader allocation to warehouses inside Blackstone’s real estate business. In its 2026 mid-year investment perspectives, Blackstone said logistics represents approximately 40% of its global real estate portfolio. The firm also reported 6% global same-store net operating income growth across its broader logistics portfolio and argued that e-commerce demand is meeting a more constrained new-supply environment in several markets.

Sanha Logistics Park II adds a Korean version of that strategy, with automation and proximity to major manufacturing activity carrying particular weight. Blackstone’s comments on the project also linked local warehouse demand to AI-related industries, though the companies did not say that the facility has been leased to AI companies or that it will operate as a data center. The property remains a dry-storage logistics development, and its large power allocation is intended to support warehouse automation and changing supply-chain needs.

ESR, meanwhile, is staying economically and operationally involved rather than handing the development over after Blackstone’s entry. That is consistent with ESR’s broader focus on logistics real estate and data centers across Asia-Pacific. In April, the company said South Korea was one of its priority markets and that it was advancing an approximately $9 billion logistics development pipeline. Keeping ESR Kendall Square as developer and asset manager gives the project continuity while Blackstone supplies majority equity capital.

The next concrete milestones will be construction progress and leasing ahead of the planned 2028 completion. The companies have not announced named tenants, a detailed leasing schedule or a more precise completion date, so those disclosures will determine how quickly the project moves from a large development commitment to an operating logistics asset.