GLP Reaches $1.2B First Closing of China Value-Add Fund With APG

GLP on Tuesday announced the first closing of the fourth fund in its China value-add series, with Dutch investment manager APG and other institutional partners having committed $1.2 billion in equity to the strategy.

GLP China Value-Add Partners IV will acquire existing assets and create value through active asset management, including cold storage conversion, the industrial developer said in a release. The fund also aims to capitalise on market opportunities arising from deleveraging initiatives and market consolidation in China.

The value-add vehicle is seeded with assets totalling 600,000 square metres (over 6.4 million square feet) of net leasable area across China’s key logistics hubs. The fund’s investment capacity of $2.6 billion will open up further opportunities, the company said, including from GLP’s acquisition pipeline.

“This is an opportune time to establish a China logistics value-add strategy that will capitalise on current market volatility,” said Teresa Zhuge, executive vice chairman of GLP China. “GLP CVA IV is a new flagship fund backed by GLP’s unique sourcing network, leading market scale and highly experienced teams.”

Full-On Fundraising

Tuesday’s announcement caps a 12-month period in which GLP raised $14.8 billion in equity for its global logistics funds, according to the firm, which has $115 billion in assets under management across real estate and private equity.

GLP CVA IV follows the recent final closing of GLP China Income Fund VI, an onshore vehicle with a portfolio of RMB 7.6 billion ($1.05 billion) in assets under management backed by leading Chinese insurance firms and other existing partners. GLP CIF VI is seeded with 20 stabilised modern logistics assets across 19 cities with a total leasable area of 2.13 million square metres.

In July, the firm revealed the creation of the GLP China Income Partners V offshore fund through a $5 billion recapitalisation of the portfolio developed within GLP China Logistics Fund I, marking a full exit of the latter vehicle.

Tim Wang, co-president of logistics and industrial real estate at GLP China, said the country’s e-commerce sector continues to dominate growth among major economies, capturing tailwinds of the COVID-19 pandemic.

“With a rise in demand for fresh food e-commerce and pharmaceutical related solutions, cold storage space continues to be highly sought after, and the market is expected to more than double in size by 2025,” Wang said.

Relationship Grows

GLP’s latest China value-add fund marks the second partnership between the warehouse specialist and Amsterdam-based APG, which manages assets totalling €524 billion ($537.5 billion) on behalf of Dutch pensioners.

In January, GLP launched its maiden Vietnam logistics development fund with an investment capacity of $1.1 billion and commitments from APG and Canadian financial giant Manulife. GLP Vietnam Development Partners I, which focuses on logistics projects in and around Hanoi and Ho Chi Minh City, is seeded with six development sites spanning a total land area of 900,000 square metres.

Graeme Torre, APG’s head of real estate for Asia Pacific, said the fund manager continues to believe in the long-term demand drivers of China’s logistics market, including the overall growth of the sector through e-commerce and structural shifts in supply chain management.

“A value-add approach in this current dislocated environment is an obvious way to capture value within this maturing asset class,” Torre said. “On behalf of our pension fund clients, we are pleased to be able to expand our relationship with GLP and believe their global and China track record, as well as their ESG credentials, will enable us to jointly drive the success of this partnership.”