Bain Pumps $300M Into Warburg Pincus-backed China Biz Park Developer

Boston-based Bain Capital Credit has committed $300 million to D&J China in a bid to accelerate the developer and fund manager’s next phase of growth, according to a joint announcement by the companies.

Set up five years ago by Warburg Pincus and e-Shang Redwood co-founder Sun Dongping, the Shanghai-based builder of business parks for the new economy plans to use the capital from the private investment firm to expand its presence in the mainland’s tier 1 and tier 1.5 cities.

In addition to establishing its current portfolio of 12 business parks, six manufacturing facilities, and one data centre, D&J has borrowed from the industrial developer fund manager playbook by setting up its own investment vehicles to manage investments in its projects.

Expanding Portfolio in Tier One Cities

With its developments focused in China’s major economic hubs of Beijing, Shanghai and Shenzhen, the company has previously stated that it plans to increase its assets under management to five million square metres by 2020.

Sun, who serves as the company’s CEO, said that the investment is an endorsement of the quality of the company’s real estate portfolio, asset management, and business model. D&J, which is headquartered in Shanghai, focuses on providing commercial and industrial facilities for innovative businesses such as electric vehicle manufacturer NIO, robotics firm KUKA, and biopharma company Sartorius.

The fresh injection of capital comes three months after WeWork opened a 6,000 square metre centre at the developer’s Candor Plaza.  The co-working giant’s debut at the commercial development in Zhangjing Hi Tech Park in Pudong adds another big name tenant to the developer’s roster of Fortune 500 occupiers, which also include Shell, Amgen, and Johnson and Johnson.

Loan Tops Up Equity Financing

“We are delighted to be able to invest in D&J China and look forward to developing a long-term partnership with a scaled and proven operator in China,” said Kei Chua, managing director and head of China and North Asia for Bain Capital Credit.

The capital infusion, verified as a loan by a source close to the deal, follows earlier rounds of equity financing over the past three years for the maturing startup.

Previous company reports show that investors have already committed at least $880 million into D&J, led by Warburg Pincus.

Just under two years ago, an affiliate of the US private equity giant led an $180 million Series D investment in the developer, in order to build on what was then a two million square-metre real estate portfolio.

That investment came after Warburg Pincus and Sun Dongping had committed $200 million to the company in a Series B investment in February 2016, following the company’s original $200 million capitalisation in 2014.

The Shanghai-based developer also manages three funds for investment in industrial property development with a total capital commitment of around RMB 16 billion.

Supporting a Pipeline of Industrial Parks

The partnership with Bain Capital Credit could allow D&J China to further Sun’s ambitions of  increasing the developer’s asset value to RMB 45 billion ($2.3 billion) by next year.

Recent milestones for the company include the launch of the D&J (Nantong) Intelligent Manufacturing Park Project at the end of last year, set up to develop intelligent manufacturing in auto parts, new materials and new energy in cooperation with the Nantong High-tech Industrial Development Zone.

Last November also saw the opening of the developer’s Shenzhen D&J Innovation Park, the first industrial park project for the Warburg Pincus-backed company in the Greater Bay Area.