Logos Joins with Ivanhoé Cambridge, PFA for $830M China Warehouse Venture

Australia-based warehouse builder Logos Property has closed its third China logistics venture, partnering with a pair of global investment heavyweights to raise up to $830 million for logistics developments across the country.

PFA Pension, Denmark’s largest commercial pension firm, and Canadian real estate fund manager Ivanhoé Cambridge are equal partners with Logos in the new entity, LOGOS China Logistics Venture 3, which will focus on developing institutional-grade logistics facilities in northern, eastern, southern and midwestern China.

“Partnerships are fundamental to our business and we are pleased to have extended our relationship with Ivanhoé Cambridge as well as attracting PFA – both leading real estate investors – into our latest China venture,” John Marsh, joint managing director of Logos noted in a statement.

The new investment will extend the developer’s footprint beyond the Shanghai region as Logos strives to build a China-wide platform, according to an announcement by the company.

Logos has now announced a total of $1.63 billion in China warehouse investments with its capital partners in less than two and a half years. “Ivanhoé Cambridge welcomes PFA as a co-investment partner with LOGOS in China,” said Rita-Rose Gagné, President for Growth Markets at Ivanhoé Cambridge. “Increasing our allocation in China reaffirms our view of the growth potential and our confidence in LOGOS as a best-in-class logistics real estate specialist across the Asia Pacific region.”

Global Capital Checks into China’s Sheds

The latest win for the Aussie-managed logistics player demonstrates the near boundless investor appetite for modern warehouse properties in China. Institutional investors have earmarked more than $10 billion for China’s logistics real estate over the past four years, according to property consultancy JLL, as money managers seek to cash in on the country’s surging e-commerce trade and rapidly growing middle class.

“The Chinese logistics sector continues to offer strong absorption and growth rates due to a long-term undersupply of modern logistics facilities,” commented Michael Bruhn, PFA’s head of real estate in the statement. “PFA has strong conviction on the growth of the logistics sector in Asia and particularly in China.”

The just-announced venture adds PFA to Logos’ list of backers, joining the shed builder’s long-term China and Asia partner Ivanhoé Cambridge. Formed in 2010 by a group of industrial real estate veterans from China and Australia, Logos launched its first China fund in June 2015, announcing a joint venture with Ivanhoé Cambridge and CBRE Global Investment Partners to invest up to $400 million into the country’s logistics real estate market.

The initial venture with the pair of global fund managers, called LOGOS China Logistics Club, was designed to own and develop high-quality warehouses in major logistics hubs, with a focus on Shanghai. Logos formed a second venture with Ivanhoé Cambridge and CBRE Global Investors, named Logos China Logistics Venture (LCLV), in August 2016, targetting around $400 million in additional funds for projects in Shanghai and neighbouring cities.

Logos Continues Asian Growth Drive

Beyond the mainland, Ivanhoé Cambridge is backing Logos expansion into Southeast Asia and India. In June of last year, the Canadian fund manager committed $110 million to Logos Southeast Asia Venture, and this past March, Logos secured new capital commitments from Ivanhoé Cambridge and Canadian fund manager CPPIB for its Singapore and Indonesia vehicles, bringing the developer’s Southeast Asia platform to $484 million.

And just last week, Logos unveiled a joint venture that is poised to invest $800 million in logistics facilities across India. The venture is backed by Ivanhoé Cambridge and QuadReal Property Group, which manages the real estate portfolio of British Columbia pension fund giant bcIMC.

Logos has a total portfolio of nearly 2.4 million square metres of logistics properties across Australia, China, Indonesia and Singapore, including nine facilities totalling more than 1 million square metres in China, according to its corporate website.

 

For PFA, the new partnership with Logos comes as the Danish fund strives to boost its allocation to alternative assets, which stood at just two percent in March of last year, to 10 percent over the subsequent five years. PFA has 1.2 million individual customers and more than DKK 500 billion ($78.2 billion) under management.