Carlyle Group Places Major Wager On Chinese Warehouses

Private equity giant The Carlyle Group and The Townsend Group announced a strategic partnership with Shanghai Yupei Group, one of the largest logistics warehouse developers in China.

The three parties plan to invest in 17 modern warehouses in China.

Carlyle and Townsend will commit approximately US$200 million to acquire equity interests in five warehouses owned by Shanghai Yupei Group.

The three plan to build 12 new warehouses in the next two years. Shanghai Yupei Group will also invest US$200 million, bringing the total equity commitment of the strategic partnership to US$400 million.

The 17 warehouses will be located in major logistics hubs across China, including first-tier cities of Shanghai, Beijing and Guangzhou. Second-tier cities such as Shenyang, Tianjin, Chongqing, Zhengzhou and Hefei will also feature new warehouses.

Upon completion of its investment plan, the strategic platform expects to own and operate a nationwide logistics warehouse network with more than 1.8 million square meters of gross floor area to serve a diverse range of tenants.

"Modern logistics is a nascent but fast growing industry in China, supported by strong growth in domestic consumption and exponential expansion of e-commerce," says Jason Lee, managing director and head of Carlyle Asia Real Estate. "We are attracted to the logistics warehouse sector in China by its favorable demand and supply fundamentals."

Li Shifa, chairman of Shanghai Yupei Group, adds, "The capital injection will allow us to further speed up land acquisitions and construction, and to quickly expand our geographical coverage."

Carlyle’s share of the equity will come from Carlyle Asia Real Estate. With local teams based in Hong Kong, Shanghai, Singapore and Tokyo, Carlyle Asia Real Estate has committed an aggregate US$2.2 billion of equity in Asia.

In China, Carlyle Asia Real Estate has made 15 investments with an expected total capitalization of US$3.1 billion.

Founded in 2002 and headquartered in Shanghai, Shanghai Yupei Group is one of the largest domestic modern logistics warehouse developers and operators in China. Since its inception, Shanghai Yupei Group has developed 10 warehouses with total gross floor area of more than 700,000 square meters.

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