Blackstone’s DragonCor Adding Southern China Warehouses, Expands Scope

DragonCor, a portfolio company owned and managed by Blackstone real estate funds, plans to add 280,000 square metres (over 3 million square feet) of warehouses in the Greater Bay Area, significantly expanding the China-focused platform’s footprint as it grows in scope to encompass non-industrial assets.

Since its inception in 2017, DragonCor has grown from a pure-play logistics platform to a portfolio that spans the logistics, residential, retail and office sectors, Blackstone said Tuesday in a release.

The Manhattan-based private equity giant gave no specific details about the new warehouses, which will boost gross floor area by 5.6 percent in DragonCor’s 5 million square metre portfolio of 40 logistics parks across 18 cities in China.

“We continue to see compelling opportunities to do business in China, where we have been active investors over the last 16 years,” said Justin Wai, head of real estate for Greater China at Blackstone. “This acquisition is an important step towards building the DragonCor platform, as we continue to grow our presence and deliver our global expertise across the real estate cycle.”

Odds and Ends

In addition to the Westlink business park in Shanghai, a property acquired by Blackstone from Singapore’s Mapletree Investments for a reported $1.25 billion in 2018, the DragonCor portfolio also includes high-quality apartments and a life science park in China’s commercial capital, a source told Mingtiandi.

DragonCor recently brought in several industry veterans to further build the team’s capabilities, Blackstone said Tuesday without revealing the names of the new hires, whose titles include head of logistics business development, head of ESG, head of legal and general manager of Westlink.

DragonCor CEO Peter Hwang credited Blackstone’s scale and prominence and the expertise of the fund manager’s local teams with enabling the platform to develop its strategies and offer a “holistic asset management solution” grounded in ESG principles.

“We are thrilled to welcome a diverse group of leaders who can bolster our business capabilities and reinforce our commitment to delivering exceptional outcomes for our people, assets and communities,” said Hwang, who joined the company in mid-2021.

China Commitment

Blackstone has remained steadfast in its commitment to China real estate despite last year’s collapse of an attempted $3 billion buyout of Soho China, the developer controlled by mainland real estate personalities Pan Shiyi and Zhang Xin.

The fund management titan led by billionaire Stephen Schwarzman signalled its continued faith in the mainland market in late 2021, when it acquired the remaining 30 percent interest it did not already own in Guangzhou International Airport R&F Integrated Logistics Park from Guangzhou R&F Properties for RMB 3.4 billion ($540 million).

A key component of the DragonCor portfolio, the Guangzhou park has a planned construction area of 1.2 million square metres and a completed rentable area of 889,820 square metres.

Blackstone’s retail assets in China include shopping centres acquired in 2019 when the investment titan bought a 50 percent stake in US-based Taubman’s Asia mall portfolio in a deal valued at $480 million. The transaction gave Blackstone significant holdings in three shopping centres: one each in the Chinese cities of Xi’an and Zhengzhou, as well as a third in the South Korean city of Hanam.