A warehouse builder backed by US private equity giant Carlyle Group looks set to be the next Chinese logistics developer to cash in on the country’s demand for shed space, according to a report today in Bloomberg.
Shanghai Yupei Group is said to be planning at $300 million Hong Kong IPO this year, and has hired Credit Suisse Group and Deutsche Bank as the lead arrangers for the planned transaction, the story cited informed sources as saying.
Little known outside of China’s logistics real estate world, privately owned Yupei has received investment in recent years from Singapore’s Temasek Holdings and Hong Kong-based private equity firm RRJ Capital, as well as Carlyle.
China’s shift toward a consumer-driven economy, and the rapid rise of ecommerce, have helped to create a shortage of warehouse space and opened up opportunities for market leaders such as GLP and Goodman Group, as well as for startups like the recently merged e-Shang Redwood and Yupei.
$300M IPO for a 40 Project Company
Founded in 2000, Yupei has now built 40 logistics projects across China totalling between three and five million square metres of warehouse space, according to the company’s website.
Although a $46 million investment in Yupei by Sam Zell’s Equity International in 2008 failed to produce an expected IPO some years back, Carlyle teamed up with real estate investment firm Townsend Group to create a $400 million joint venture with Yupei in 2013.
Helped along by a booming ecommerce sector and the success stories of Global Logistics Properties and other investors in China’s logistics sector, Yupei founder Li Shifa went on to attract another $250 million in funding from Temasek Holdings and RRJ Capital in 2014.
Yupei has also been successful in attracting a high profile list of occupiers for its warehouses, with Bosch, Itochu, JD.com, Kerry Logistics, Siemens, and Xiaomi all listed as among its core clients.
China Shed Investments Become a Thing
While full details of Yupei’s IPO have yet to be released, the company could benefit from excitement being generated by other high profile investments in the logistics sector.
During February, Canada’s Ivanhoe Cambridge and Australia’s Macquarie Group announced that they were investing an undisclosed sum to take over Logos Property Group, a warehouse builder with a portfolio spanning China and Australia.
The deal for Logos came less than one month after Shanghai-based e-Shang and Singapore’s Redwood Group merged in a non-cash deal to form one of the region’s largest logistics real estate platforms. The newly merged company, which is now known as e-Shang Redwood, is headed for its own IPO within a year’s time which is said to target a value well above $1 billion.
China Vanke has also entered the logistics sector with high profile backing of its own, after Blackstone Group agreed to invest in the home building giant’s mainland logistics projects.