JD.com Warehouse REIT Raises $260M From Shanghai IPO

Harvest & JD Storage Logistics REIT completed its listing on the Shanghai Stock Exchange on Wednesday, as the trust operated by JD Property under e-commerce giant JD.com raised RMB 1.76 billion ($260 million) from its initial public offering.

The offline allotment reached 126.04 in over-subscription multiples, JD.com said in a blog post. The newly listed REIT’s units rose 11.6 percent in price on their first trading day, China Daily reported.

The underlying assets of the trust are three logistics parks totalling 350,995 square metres (1.2 million square feet) with a combined value of RMB 1.56 billion in western, central and northern China.

“JD.com’s development is rooted in the real economy, as it grows in and serves the real economy,” said Sandy Xu, chief financial officer of JD.com. “The value of the company’s supply chain infrastructure is recognized by various sectors of society including investors.”

Fully Occupied Trio

Beijing-based Harvest Fund Management is the fund manager for the REIT, whose initial portfolio comprises the first phase of JD.com Chongqing E-commerce Park and the Asia No.1 Logistics Parks in Wuhan, Hubei province, and Langfang, Hebei province.

The trio of properties owned by the REIT are 100 percent occupied with an average leasing period of five years, compared with the industry average of three years, according to filings with the Shanghai Stock Exchange.

“All three are scarce high-standard warehouses that represent the highest level of warehouses in China in terms of scale and automation, offering reliable profitability and a strong capability to fend off risks,” JD.com said in Wednesday’s blog post.

China’s second-largest online retailer by sales after Alibaba Group, JD.com operated a nationwide network of over 1,300 warehouses through its logistics services arm, JD Logistics, at the end of 2021, according to the company’s most recent annual report.

Including “cloud warehouses” operated by third-party warehouse owner-operators, the NASDAQ-listed firm had a logistics network spanning over 24 million square metres.

Scene Gathers Momentum

JD.com is touting Harvest & JD Storage Logistics REIT as China’s first public warehousing and logistics REIT issued by a private company, although a logistics fund sponsored by Warburg Pincus-backed developer DNE Group received approval to become a REIT last November.

DNE’s D&J New Economy Industrial Park REIT is based on a portfolio of four Yangtze River Delta industrial parks with a valuation of RMB 1.38 billion.

Singapore-based logistics giant GLP became the first international company to list a REIT in China when it partnered with a group of mainland firms to launch GLP C-REIT in June 2021. The vehicle’s IPO on the Shanghai exchange issued 1.5 billion shares to raise more than RMB 5.8 billion.

Hong Kong-based developer ESR last December announced plans for a China REIT seeded with a trio of the group’s logistics projects in the city of Kunshan, west of Shanghai. The infrastructure securities investment fund would be listed on the Shanghai Stock Exchange.