China’s DNE Group has set up an onshore fund with a total investment of RMB 6 billion ($870 million), as the Warburg Pincus-backed industrial developer looks to pursue investment opportunities in new economy infrastructure assets in key economic hubs.
The seed assets and pipeline properties of the fund are distributed across the Yangtze River Delta, the Beijing-Tianjin-Hebei region and other key city-clusters, DNE said Wednesday in a release. The projects will serve various sectors including local retail, e-commerce, manufacturing, cold chain and logistics.
DNE described the fund’s limited partners as Chinese institutional investors seeking stable cash flow and investment returns from a high-quality asset portfolio.
“We are pleased to work with leading professional investors in China in a partnership that we believe will create great synergy and win-win,” said DNE chairman and CEO Sun Dongping. “With deepening urbanisation and the development of private consumption in China, we expect the new economy infrastructure in China’s key economic hubs will remain in short supply and resilient.”
The new fund is one of the largest RMB vehicles launched by DNE since the group was formed in late 2021 through the merger of D&J China and New Ease China, said Sun, who co-founded D&J, New Ease and e-Shang, a precursor of Hong Kong-listed industrial giant ESR.
Last September, DNE received permission for China’s first REIT sponsored by a private company, a RMB 1.38 billion ($200 million) trust dubbed D&J New Economy Industrial Park REIT. The Shanghai-listed vehicle is based on a portfolio of four Yangtze River Delta industrial parks injected into the trust by DNE.
Also last year, DNE formed a $1.2 billion joint venture with an unnamed global institutional investor to pursue opportunities in life science parks in China’s top-tier cities. The seed project of the platform is a life science park at the Shanghai Zhangjiang Science City cluster.
DNE now manages more than $15 billion in assets and 14 million square metres (150 million square feet) of gross floor area in China.
Vote of Confidence
The last five months saw a wave of new fundraising as deep-pocketed investors bet on the resurgence of Asia’s biggest real estate market.
Last November, Singapore’s CapitaLand Investment teamed up with 10 local investors to establish RMB 4 billion ($550 million) in new renminbi-denominated vehicles. The pair of funds each hold a single business park asset, with the fund management unit of CapitaLand Group identifying Ascendas i-Link, a Shanghai office property from its own balance sheet, as one of the two acquisitions.
That same month, industrial developer GLP announced the first closing of the fourth fund in its China value-add series, with Dutch investment manager APG and other institutional partners committing $1.2 billion in equity to the strategy. Around the same time, GLP achieved the final closing of its sixth China income fund with RMB 7.6 billion ($1.05 billion) in assets under management.
In February of this year, CapitaLand Investment established a China data centre development fund with plans to invest in two Greater Beijing hyperscale projects that are seen adding S$1 billion ($750 million) to the firm’s funds under management upon completion.