Warburg Pincus-Backed New Ease in $200M Logistics JV with UK’s Actis

Shanghai-based industrial developer New Ease acquired a new partner today as the company chaired by ESR co-founder Sun Dongping announced a joint venture with fund manager Actis.

Warburg Pincus-backed New Ease, together with the UK emerging markets specialist, plan to initially invest approximately $200 million in the new investment vehicle to develop three logistics projects in the mainland China cities of Chongqing, Tianjin and Quanzhou, in Fujian province.

The logistics initiative comes just three months after Actis invested $180 million in mainland China data centre developer Chayora, and nearly a year and a half after Warburg Pincus provided $400 million in capital for New Ease.

China Industrial Veteran Signs Up New Partner

In a statement New Ease explained the joint venture as a bet on China’s ongoing urbanisation and the growth in domestic consumption, while Actis pointed to Sun’s industry experience as a catalyst to the new enterprise.

“By leveraging the network and industry experience of our team, we have assembled strong pipelines in such locations and look forward to working with leading investors and partners like Actis in future,” Sun said in the statement.

Actis holds a 70 percent stake in the joint venture, according to an account in IPE, with New Ease holding the remaining 30 percent. The two parties left open the possibility that the joint venture could be extended beyond the three projects included in the current framework, without making specific commitments.

Sun, who co-founded logistics developer e-Shang with Jeffrey Shen and Warburg Pincus in 2011, set up New Ease in 2018. When e-Shang merged with Japan-based Redwood Group in 2016, Sun worked with Warburg Pincus to set up office-focused developer D&J China that same year and continues to serve as chairman of that company.

By the end of 2019 New Ease had approximately four million square metres (43 million square feet) of logistics projects in operation or under development, according to a statement by Actis.

Actis Sees Opportunity in China Logistics

Despite a surge of capital into China’s industrial real estate sector in recent years, Actis points to an ongoing shortage of international grade warehouses in the country, and sees New Ease as a partner that can help exploit this scarcity.

“Despite the rapid growth in demand, there remains a shortage of high quality logistics facilities in China,” Brian Chinappi, Partner and Head of Actis Asia Real Estate said in a statement from the UK company. He added that, “We are deeply impressed by Mr. Sun and his team’s successful track record in the Chinese logistics property market.”

The company, which has raised $15 billion in capital since it was founded in 2004, entered the Asia market in 2018 through its purchase of Standard Chartered Bank Principal Finance Real Estate, which had been a unit of one of Hong Kong’s most prominent banks.

In August of last year Actis was reported to be raising as much as $600 million for a new Asia real estate fund, and in October the firm invested $180 million to take a majority stake in data centre developer Chayora.