Singapore-based global logistics company GLP has established a China value-add fund worth RMB10 billion (US$1.6 billion) with an investment from NYSE-listed China Life Insurance Company Ltd.
GLP China Value-Add Venture I has total equity commitments of RMB10 billion (US$1.6 billion) and will focus on acquiring completed logistics and industrial assets in China. GLP China is the asset manager and will contribute seed assets to the Venture, according to GLP’s announcement.
The transaction expands GLP’s fund management platform to US$46 billion, representing an annual growth rate of 56% since 2011, the company said. In 2013, the company launched its US$3 billion China Logistics Fund CLF Fund I, a platform focused on the development of logistics infrastructure in China. In 2015, the company announced CLF II after receiving US$3.7 billion of equity commitments. The fund aimed to reach an investment capacity of US$7 billion when fully leveraged.
“This transaction, is consistent with several key elements of our strategy including recycling assets and further growing our fund management platform." said Teresa Zhuge, Vice Chairman of GLP China. "Demand from institutional investors to partner with GLP continues to be strong and we plan to establish additional new income funds in China.”
The Chinese logistics sector is benefiting from the booming online retail and new retail strategies being pursued by China’s tech giants like Alibaba, Tencent, Baidu and JD.com. As such, the sector has seen a steady stream of major investments over the last several months.
In January, E-commerce firm JD.com reportedly staged a fundraising round of at least US$2 billion for its logistics unit JD Logistics, at a valuation of around US$10 billion.
In December, Canada Pension Plan Investment Board (CPPIB) announced that it had invested HK$1.94 billion (US$248 million) to acquire an interest in Goodman Hong Kong Logistics Partnership (GHKLP), one of Goodman’s flagship logistics partnerships with the largest portfolio of logistics properties in Hong Kong.
A month earlier, Chinese venture capital firm Shenzhen Capital Group Co., Ltd. and retail firm Suning Commerce Group Co., Ltd agreed to jointly establish a RMB30 billion (US$4.5 billion) logistics real estate fund.