China’s most boring real estate sector got a bit of love last week when Canadian commercial real estate firm, Brookfield Property Partners agreed to acquire logistics developer Gazeley for an undisclosed amount. Gazeley is a major developer of warehouses, and currently has five projects in China, as well as having developed a number of other projects which it has already sold to other investors.
The Gazeley deal gives Brookfield 30 percent ownership in the warehouse developer’s 524,000 square meters of existing assets and a land bank of an additional 1.3 million square meters, as well as options on another 1.1 million square meters.
The move to secure Gazeley’s assets can be seen as part of the growing attractiveness of logistics real estate, particularly as it relates to China.
According to a recent report in the Wall Street Journal, property consultants and logistics property developers said there had been an upturn in investment interest in logistics real estate this year, primarily as a result of increasing rents driven by e-commerce and rising domestic consumption.
The Journal report noted that Australia’s Goodman Group plans to invest $3 billion in China’s logistics industry over the next few years. According to Goodman China Managing Director Philip Pearce, “Prices in other asset classes have gone up, and yields have compressed a bit, but not in industrial property.”
And sovereign-wealth funds, pension plans, and private-equity players have also shown increasing interest in China’s warehouse market.