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Fundraising, Venture Capital

Shenzhen Capital Group, Suning To Establish $4.5B China Logistics Real Estate Fund

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Chinese venture capital firm Shenzhen Capital Group Co., Ltd. and retail firm Suning Commerce Group Co., Ltd have agreed to jointly establish a RMB30 billion (US$4.5 billion) logistics real estate fund.

The fund, which is raising RMB5 billion (US$750 million) in its first phase, will invest in Suning’s own warehousing logistics facilities, as well as acquire resources from other mature companies, according to a company announcement. It will have three years to make investments, followed by two years for exits via real estate investment trust, initial public offering, equity transfer and asset securitization.

The new fund will help Suning build a logistics infrastructure network with 1,200 to 1,500 square meters of warehouse space under management.

The new fund will be managed by Suning Shenzhen Capital Group Fund Management Company, in which Suning and Shenzhen Capital Group holds a 51% and 40% stake respectively. Suning will account for 51% of the initial RMB5 billion first-phase funding, while Shenzhen Capital Group will contribute the rest.

Shenzhen Capital Group is participating in the fund via its subsidiary Shenzhen Capital Group Real Estate Fund Management Company. Sun Dongsheng, the president of Shenzhen Capital Group, once said during an interview with media that the Real Estate Fund Management Company targets projects like logistics real estate, education real estate and hospital real estate. It has lower return but more stable value compared with the company’s venture capital fund.

Shenzhen Capital Group, with a total of RMB218 billion (US$33 billion) under management, teamed up with Suzhou government and other entities to launch a big data-focused government guidance fund this January, with a total fundraising target of RMB5 billion (US$732 million). That fund focuses on investment opportunities in big data trading platform, software-as-a-service projects, chips sensors and digital technologies.

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