Keppel Teams With BLOGIS to Acquire First Asset for China Logistics Fund

Singapore’s Keppel Capital has partnered with Chinese industrial developer BLOGIS to acquire the maiden asset for Keppel’s China logistics fund.

The warehouse in Dongxihu district of Wuhan is the first of a planned series of joint investments by the fund and Shenzhen-based BLOGIS across a pipeline of opportunities in key logistics markets, including the Yangtze River Delta and the Beijing-Tianjin-Hebei region, Keppel Capital said Wednesday in a release.

Managed by Keppel Capital China, the fund has committed with BLOGIS to a combined assets under management of RMB 3.2 billion ($470 million), as the e-commerce and food segments continue to sustain logistics demand despite the impact of COVID-19 on the domestic market.

“China’s logistics sector has continued to see growth and capital inflows in recent years,” said Eric Goh, chief executive of Keppel Capital China. “Driven by rising domestic consumption as well as e-commerce, China’s demand for quality logistics facilities is expanding rapidly.”

Wuhan Warehouse

Keppel Capital didn’t provide an acquisition price or precise details about the Wuhan warehouse, saying only that the facility spans 70,000 square metres (753,474 square feet) and serves the e-commerce, third-party logistics and cold-chain sectors.

Known in China as Baowan Logistics Holding, BLOGIS was set up by the Nanshan industrial group in 2011 and has since grown to a network of more than 70 logistics parks with ​​nearly 10 million square metres of space.

“Keppel is happy to partner BLOGIS for their expertise in the development and operation of logistics assets in China,” Goh said. “Together with BLOGIS, the Keppel China logistics fund is seizing opportunities presented by the resilient logistics sector to deliver attractive risk-adjusted returns for our investors.”

The collaboration and acquisition are not expected to have a material impact on the earnings per share and net tangible assets per share of SGX-listed parent Keppel Corporation for the current financial year, said Keppel Capital, which managed assets valued at S$42 billion (now $31.3 billion) at the end of 2021.

Tech-Enabled Approach

Launched in early 2021, Keppel Capital’s first China-focused logistics property fund had an initial equity commitment of RMB 1.4 billion ($220 million) with an option to upsize by a similar amount by the end of that year.

The fund is in line with Keppel’s Vision 2030 plan, which the group unveiled in 2020 as a way to keep its business in step with an economy shifting to sustainable, tech-enabled approaches.

To that same end, Keppel in early 2022 achieved a $1.1 billion final closing of its second data centre fund targeting investments in Asia and Europe, including a $150 million commitment from China’s Asian Infrastructure Investment Bank.

The Beijing-based development bank contributed $100 million through a parallel fund structure and $50 million through co-investments to Keppel Data Centre Fund II, according to Keppel Capital, which manages the closed-end vehicle under its Alpha Investment Partners private fund management division.