China Vanke Shuffles Investors as Logistics Fund Shrinks Over 50%

China Vanke has announced to the Hong Kong Stock Exchange that its logistics real estate fund has shuffled investors, with the investment vehicle shrinking by over 50 percent to RMB 2.95 billion ($430 million).

Vanke, China’s second-largest real estate developer in terms of sales in the first half of 2018, said it has brought three new partners — Taikang Life Insurance, Grand China Fund, and Qianhai Hanghui — into the fund, which was founded in 2017 and once was invested to the tune of RMB 6 billion. The fund targets logistics projects in China.

Grand China Fund will now manage the fund in place of Shenzhen Putai Investment, which has withdrawn, Vanke said

Taikang Life Takes Leading Stake

Following the reorganisation of the fund, Taikang Life Insurance is now the biggest investor of the seven major partners, with a 46.82 percent share worth RMB 1.38 billion and Qianhai Hanghui holds a 13.53 percent share of the fund worth RMB 400 million.

Jiangsu International Trust, formerly the fund’s biggest investor, has also withdrawn its money, Vanke said. The government-owned trust contributed RMB 3.6 billion to the fund in October 2017, at the time accounting for 60 percent of the financing.

Vanke also reduced its own commitment to the slimmed down fund by nearly RMB 500 million to RMB 1.01 billion, although its proportional stake in the initiative rose from 25 percent to 34.16 percent due the to smaller overall pool.

The Shenzhen-based developer said the adjustment of investors occurred because of “changes of policy and negotiations between partners,” although it is generally believed that Vanke wants to expand its influence over the fund.

Three other investors — Dongguan Boyu Import Logistics, Ganyuansheng Investment, and Feihong Yihao Investment — have all reduced their investments in the fund in the latest round of adjustments.

Vanke Grows Logistics Portfolio

In recent years, China Vanke has paid increasing attention to developing its logistics business. In July 2017, it led a consortium in taking over Global Logistics Properties (GLP), the largest operator of warehouses in China. The consortium paid US$11.6 billion in the deal, and delisted GLP from the Singapore Exchange to take it private.

Since becoming the largest shareholder of GLP, Vanke has launched 54 new logistics projects in the mainland, including logistics parks in Shanghai, Ningbo, Hangzhou, and Tianjin. In July it acquired Swire Properties’ cold-chain business — a total of seven cold storage centres in Shanghai, Guangzhou, Nanjing, Chengdu, Xiamen, Langfang and Ningbo.

Vanke now operates 110 logistics centres, totaling 7,300,000 square metres (78,576,546 square feet), in 36 cities around China.