BlackRock Invests in Metcold China Cold Chain Logistics

BlackRock is the latest global player to enter China’s cold storage sector, with the US investment manager agreeing to invest in a portfolio of facilities developed by mainland-based logistics firm Metcold.

New York-based BlackRock last month agreed to invest in assets held by Metcold’s Opportunity Funds I and II, the companies said in a release.

The investment amount and specific assets weren’t disclosed. Metcold manages 15 cold chain facilities with a total investment of over RMB 6 billion ($930 million), total planned gross floor area of 1.3 million square metres (14 million square feet) and cold storage capacity of 2.8 million cubic metres (99 million cubic feet).

“We are delighted to invest in this growing infrastructure sector in China and participate in a uniquely attractive and resilient theme tied to the modernisation of China’s food logistics chain, improved safety and reduced food wastage,” said Serge Lauper, BlackRock’s global head of infrastructure solutions.

Mainland Opportunities

Founded in 2015, Metcold established its Opportunity Fund I that year to invest in cold chain facilities in Xi’an, Kunshan and Xiajing. Those three projects are in full operation.

Further projects in the cities of Changzhou and Nantong in Nantong province are expected to be launched in the second quarter of this year, while the company has another Jiangsu facility underway in Wuxi as well as in Hainan, with those two additions to the portfolio due for completion in 2022.

Metcold reached a key milestone in 2018 when Australia’s Macquarie Infrastructure and Real Assets became a major investor and shareholder in the firm’s platform, creating the first specialised food supply infrastructure service provider backed by institutional capital in China.

In March of this year, Metcold announced an agreement with Metropolitan Real Estate that would see the US fund manager — then owned by Carlyle Group, now part of BentallGreenOak — invest a total of $50 million in Metcold’s two opportunity funds and in a cold storage project in Shanghai.

Metropolitan had previously joined forces with US developer Hines last year to acquire a 33,800 square metre cold storage facility and adjacent development site in southern China’s Guangdong province.

Cold, Hard Figures

China’s cold chain network is gaining in importance with the rise of e-commerce and online grocery.

The Asian superpower’s cold chain was worth RMB 276 billion in 2019 after growing at a compounded annual rate of 10.5 percent from 2010. With handling of fresh produce and other food products driving the majority of demand, the market is expected to reach RMB 512 billion in 2026, according to a report published last year.

Credit Suisse expects online grocery spending — including fresh foods and household goods — in China to reach RMB 4.2 trillion in 2025, up from RMB 900 billion last year, the Wall Street Journal reported.