GLP, Asia Pacific’s biggest warehouse builder and fund manager, on Wednesday announced a first closing of its China Logistics Fund III at $1.75 billion, representing the lion’s share of the development vehicle’s $2 billion target.
The freshly-committed capital will go towards developing the next generation of modern and environmentally-friendly logistics facilities in APAC’s biggest market, including smart warehouses with integrated technologies to meet evolving customer requirements, the Singapore-based firm said in a release.
CLF III is the third vintage of GLP’s mainland logistics development fund series and is expected to achieve assets under management of as much as $5 billion when fully deployed. The fund’s unnamed backers include institutional investors across North America, Asia, Europe and the Middle East, most of which are existing GLP investors.
“GLP CLF III is indicative of the continued investor appetite for modern logistics in China,” said Teresa Zhuge, executive vice chairman of GLP China. “The scale which GLP operates enables us to deploy capital efficiently to build a resilient portfolio of next generation of logistics facilities with modern solutions and integrated technologies that contribute to economic growth and job creation in surrounding communities.”
The CLF series of development funds was launched in 2013 with the $3 billion CLF I. That fund and the $7 billion CLF II from 2015 will deliver a combined 15 million square metres (150 million square feet) of logistics space across 150 parks in 40 cities, GLP said.
With the addition of CLF III, the firm manages over $7 billion in discretionary equity for logistics real estate development in China, more than any other private real estate manager.
GLP’s portfolio of logistics assets and land holdings in China exceeds 47 million square metres of gross floor area and $45 billion in real estate assets under management. More broadly, GLP has $72 billion in assets under management in the country across logistics, data centres, renewable energy and private equity strategies, including the listing of the first logistics C-REIT on the Shanghai Stock Exchange in June.
GLP C-REIT’s portfolio consists of seven logistics assets in Beijing, the Yangtze River Delta and Guangdong province, with over 700,000 square metres of GFA and properties averaging 98.7 percent occupancy as of December 2020.
GLP said it delivered more than 3.2 million square metres of newly-built logistics assets in prime locations across China in the last 12 months, while signing 18.7 million square metres of new and renewal leases to long-term customers such as e-commerce and 3PL players.
Competing with GLP in the same space is arch-rival ESR, which in August announced the creation of its own China logistics development fund with capital commitments from Dutch pension fund manager APG Asset Management and Singapore sovereign wealth fund GIC, targeting up to $4 billion in investment capacity.
The fund, called ESR China Development Platform, will invest in warehouses and warehouse/industrial mixed-use properties to be sourced, developed and managed by the Hong Kong-listed logistics and fund management giant.
Aside from its development strategies, GLP in April revealed the closing of its newly-established GLP China Income Fund II with capital commitments totalling RMB 5.8 billion ($900 million).
Seeded with a portfolio of 13 modern logistics assets in prime locations across the Yangtze River Delta and southern and midwestern China, the core-plus CIF II seeks to generate long-term, stable returns by investing in warehouse properties in prominent locations.
CIF II’s fundraising came one year after the final closing of the $2.1 billion CIF I, which is fully seeded with 34 income-producing assets in 18 cities across China.
Other key players in China sheds include Goldman Sachs, which in July announced a $488 million warehouse joint venture with Warburg Pincus-backed New Ease, and Blackstone, which manages and develops mainland logistics assets under its DragonCor platform.