Shanghai-based developer and fund manager DNE Group is ready to invest another RMB 14 billion ($2 billion) in China’s shed market after signing an agreement with an unnamed global institution, the company said on Thursday.
Helmed by ESR co-founder Sun Dongping, DNE says that having set up an offshore development joint venture with its partner, the company aims to use that money to develop and operate industrial and logistics facilities in key mainland hubs, including the Yangtze River Delta, Guangdong province and the Bohai basin area around Beijing, Tianjin and Hebei province.
“The setup of this JV Platform manifests the global investor’s confidence in China’s economic prospects and the rapid rise of new economy segments,” said Sun, who serves as chairman and chief executive of the company. “It is also a strong recognition of DNE as a leading fully-integrated developer and operator in new economy infrastructure in China.”
Formed by the merger of D&J Group and New Ease China in December 2021, DNE now has $16 billion in assets under management and over 14 million square metes of facilities in its portfolio, according to a statement. The company has previously launched development ventures with partners including Goldman Sachs, JP Morgan and Quadreal, with DNE Group having last year listed one of China’s earliest REITs of logistics properties.
Fresh Backing for Mega-Sheds
Describing its investor as a capital partner, DNE is set to act as manager of the new platform, including looking after investment, development and asset management on behalf of the joint venture, according to the statement.
With projects spread across Shanghai, Beijing, Wuhan, Chongqing and other major hubs, DNE is currently developing the 1.45 million square metre (15.6 million square foot) Shanghai Jinshan Galaxy project in the city of Jinshan in northern Zhejiang province.
In northern China, the company is currently developing its 319,000 square metre Yanjiao Sanhe facility in Langfang, Hebei province and a 211,000 square metre distribution centre at Beijing’s airport.
In the industrial sector, DNE’s projects span both ambient and cold chain logistics facilities, as well as R&D and manufacturing projects.
In Shanghai the company has life science facilities in operation in the Lingang, Zhangjiang High Tech Park and Caohejing areas, with more tech-centric properties underway or completed in Jiangsu and Zhejiang provinces as well as in Chongqing.
Offshore and On
DNE’s latest development platform was announced just two weeks after the company said it had established a RMB 6 billion onshore fund to invest in new economy infrastructure assets in China’s principal commercial hubs.
The company’s partners in that fund were described as Chinese institutional investors, adding to a roster of major backers for the company’s ventures.
In July 2021 Goldman Sachs Asset Management signed a deal to establish a $488 million vehicle to invest in two portfolios of mainland logistics properties with New Ease, which was also founded by Sun. Just four months earlier, New Ease had set up a $1 billion joint venture with British Columbia’s Quadreal to develop and invest in warehouses in the country.
During that same year, PGIM bought a pair of warehouse portfolios from New Ease for $323 million.
In September last year DNE received approval from the Shanghai stock exchange to list D&J New Economy Industrial Park REIT as the first purely privately sponsored REIT to list on a mainland exchange.
In its October IPO, the REIT raised more than RMB 1.5 billion for its portfolio of mainland logistics facilities.