MQ Logistics’ Gimpo Center in Gyeonggi, northwest of Seoul
Warburg Pincus is expanding its bets on Asia’s shed sector with the US private equity firm today announcing an investment in a South Korea industrial joint venture under its Asia Pacific real estate strategy.
The New York-based titan, which has invested in logistics ventures in APAC’s largest markets, announced that it is teaming up with Seoul-based third party logistics provider and warehouse developer MQ to establish Qube Industrial, with the joint venture seeded with a portfolio of four Seoul-area warehouses.
“With several megatrends driving the continued demand for modern logistics warehouses from e-commerce and 3PL players, and attractive momentum as a result of supply and demand dynamics of institutional quality warehouses in key markets like Seoul and Busan, South Korea is rapidly becoming a meaningful market for both domestic and international institutional investors in industrial real estate,” said Warburg Pincus managing director Li Fan.
The partners are launching the Korean venture after tenants took up a net 1.2 million (13 million square feet) of grade A warehouse space in the greater Seoul area from July through September in the capital region’s biggest quarter ever for logistics leasing, according to JLL.
Centred on Seoul
Qube’s seed portfolio spans more than 300,000 square metres in top sub-markets around Seoul including stabilized, under construction and development assets, according to the statement.
MQ founder and chairman Andrew Kim
Qube, which invests in other industrial space in addition to logistics, is positioned as a bet on infrastructure for Asia’s new economy, with the US firm pointing to the experience of its local partners as critical to its prospects.
MQ chairman Andrew Kim founded the logistics provider in 2000 with the group now operating seven facilities nationwide, according to its website. Kim is expected to leverage his in-country network to source future deals for the venture.
Having developed nearly 20 development projects over the past two decades, MQ now has around $2 billion of assets under management spanning more than 1.4 million square meters in Greater Seoul and Busan. The company operates as a a vertically integrated and self-funded warehouse developer.
“We are excited to partner with Warburg Pincus to build a leading logistics and industrial real estate portfolio in South Korea,” Kim said. “As one of the most established institutional investors, Warburg Pincus has a proven track record of supporting multiple successful real estate businesses in Asia.”
Qube is led by former Oaktree and CapitaLand executive James Lim, who as chief executive is responsible for company operations across deal sourcing, due diligence and deal execution. His duties carry over into the development and asset management realms, including looking after approvals and development management as well as leasing, asset and fund management.
Lim was a managing director with Oaktree Capital Management in Hong Kong from 2019 through 2022 and also led CapitaLand’s private fund business in Singapore as chief executive of CapitaLand Investment Management from 2017 through 2019.
Qube chief executive James Lim
The University of California, Davis graduate also has previous experience with HSBC and BNP Paribas CIB.
“We are very excited to collaborate with Andrew, a seasoned business veteran, and the high-caliber management team to capture the tremendous opportunities in the years to come,” Warburg’s Fan said. “We will leverage our in-depth expertise and extensive experience to support the venture going forward.”
Logistics Expansion
Warburg Pincus is investing in the joint venture through its Warburg Pincus Asia Real Estate Fund, which closed on $2.8 billion in capital in December of 2021. The company now has over $8 billion invested in more than 70 real estate ventures, having also invested in BW Industrial in Vietnam and NWP Property in Indonesia.
Other companies in the firm’s Asia Pacific real assets portfolio include Vietnam’s Vincom Retail, regional data centre operator Princeton Digital Group, China’s DNE and self-storage startup StorHub, with the company also ranking as the largest shareholder in Hong Kong-listed ESR.
The firm has made industrial real estate a priority sector in Asia Pacific, having invested in 10 ventures in the region over the past 15 years.
ESR operates in Korea through its ESR Kendall Square unit, which also sponsors ESR Kendall Square REIT, the country’s first pure-play listed trust of warehouse properties.
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