GLP said last week that it has closed on its China Office Value Add Fund I, the first urban renewal fund in the country for the Singapore-based warehouse specialist.
The establishment of the fund reflects the strategy of GLP China to actively support urban renewal and promote investment in technology, innovation and office properties, according to a release posted on the company’s Chinese-language website.
As part of the fund’s activities, GLP is renovating Building D of Yingdu Mansion in Beijing’s Zhongguancun technology hub with a goal of upping the project’s appeal as a home for high-tech and creative occupiers in China’s capital.
“Through transformation and operational optimisation, GLP’s professional team is committed to creating a better work experience and urban development,” said Teresa Zhuge, executive vice chairman of GLP China.
Betting on Beijing
GLP purchased Building D of Yingdu Mansion in late 2020 from a single-asset REIT managed by Huayuan Group, for approximately $140 million, Mingtiandi has come to understand. The project at the fringe’s of Beijing’s top innovation hub is now fully leased to tech occupiers on long-term contracts, according to GLP’s announcement.
The building on Zhichun Road in Haidian district has more than 30,000 square metres (322,917 square feet) of space and is near many top universities and scientific research institutions. With strong demand for innovative and entrepreneurial office space, the property has great potential commercial value after the renovation, according to GLP.
Zhuge said the value-add fund would help meet customers’ need for smart and sustainable office space while providing investors an opportunity to participate in urban renewal projects.
GLP acquired another Beijing office building, the ZT International Center, from local real estate firm Zhaotai Group for $522 million in the first quarter of this year, according to Real Capital Analytics’ Capital Trends report for the period. Investment bank Founder Securities occupies 20,000 square metres of the 124,000 square metres of office space in the building at East 2nd Ring Road.
Business Park Power
Although best known for logistics development, GLP also commands a portfolio of business parks in mainland China. GLP I-Park owns and manages nearly 30 parks with a gross floor area of 5 million square metres and nearly 400 corporate customers, representing a total investment of over RMB 30 billion ($4.7 billion).
In May, GLP-backed ACR Asset Management acquired the Beijing Diamond Plaza building at Zhongguancun Software Park from private equity firm Sino-Ocean Capital for around $132 million, Mingtiandi now can reveal. ACR announced in July that Japanese developer Mitsubishi Estate was taking an equity stake in the fully-occupied 22,000 square metre property.
Both the Yingdu Mansion and the Diamond Plaza were brokered by the capital markets team at Cushman & Wakefield.
Mingtiandi understands that the Diamond Plaza stake sale represents the initial deal under a co-investment platform between Mitsubishi Estate and ACR, which was founded by former Cushman & Wakefield greater China CEO Edward Cheung. Teresa Zhuge and Ming Mei, GLP’s co-founder and chief executive, serve as board members at ACR.
New Economy Infrastructure
GLP is also one of the largest independent data centre operators in China, with assets expected to deliver 1,400 megawatts of IT capacity upon completion. Bloomberg reported in May that Chinese firm GDS was considering buying GLP’s data centre business for as much as $10 billion.
More in line with its traditional pursuits, GLP last month announced a first closing of its China Logistics Fund III at $1.75 billion, representing the lion’s share of the development vehicle’s $2 billion target. The freshly-committed capital will go towards developing the next generation of logistics facilities in APAC’s biggest market, including smart warehouses with integrated technologies to meet evolving customer requirements.
GLP has $72 billion in assets under management in China across logistics, data centres, renewable energy and private equity strategies, including the listing of the first logistics C-REIT on the Shanghai Stock Exchange in June.