Firm Launches Largest China Warehouse Fund

Firm Launches Largest China Warehouse Fund

Commercial News » Asia Pacific Commercial News Edition | By Francys Vallecillo | November 14, 2013 11:03 AM ET

Global Logistics Properties Ltd. is launching a $3 billion fund focused on the development of logistics properties in China, hoping to benefit from the growth of e-commerce and expansion of retail chains. 

GLP, will team up with six institutional investors, including pension and sovereign wealth funds, to "capture the significant opportunities arising from growth in domestic consumption and the shortage of modern logistics facilities in China," the company said in a statement. 

The fund will develop new, wholly-owned logistics developments in China over the next three years, with GLP maintaining a 56 percent stake in the fund. The fund will be the largest China-focused logistics fund in the world, the company stated.

The fund "will provide significant capital to support our sustainable long-term growth in this exciting market, while enhancing returns on our invested capital," Jeffrey H. Schwartz, co-founder of GLP and chairman of the executive committee, said in the announcement. "Our strong development pipeline and best-in-class fund management platform will enable us to strategically scale our business while delivering superior risk-adjusted returns for our stakeholders."

GLP, will seed the fund with 1.8 million square meters (19 million square feet) of leasable area, the company said. "Future developments will benefit from GLP's strong land reserve," the group said.

It has secured a $1 billion credit facility with China Merchants Bank for the fund. E-commerce now represents 22 percent of GLP's leased area in China.

The increase of e-commerce business is leading to higher interest in warehouses around the world.  Commercial property fund Tritax has announced its plan to raise £200 million for the first listed "big box" U.K. REIT in invest in warehouses. 

Earlier this month GLP and GLP Japan Income Partners sold a logistics portfolio in Japan to GLP J-REIT for approximately $277 million. 

Global Logistics Properties is the largest provider of logistics facilities in China, Japan and Brazil, with more than $16 billion in its portfolio. It plans to increase its assets under management to $11.4 billion with the new fund.

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