LaSalle Adds Suzhou, Tianjin Warehouses to China Logistics Fund

LaSalle Investment Management continues to expand its China logistics holdings as the real estate fund manager picks up a pair of new warehouses in the mainland’s two largest consumer markets.

The investment affiliate of property agency JLL announced on Friday that it had acquired the new facilities, one near Shanghai, and a second in a satellite of Beijing, to add to its LaSalle China Logistics Venture (LCLV) – a $1 billion fund aimed at developing and managing warehouse properties in China.

“The COVID-19 pandemic has underscored the importance of efficient distribution,” said Mark Gabbay, LaSalle’s chief executive for Asia Pacific. A recent study by Japanese e-commerce provider network Rakuten found that 46 percent of consumers in Asia Pacific reported increased online shopping during the coronavirus emergency.

Combined, the two warehouses add nearly 139,273 square metres (1.5 million square feet) to the fund’s portfolio, as this year’s surge in online buying makes logistics one of the most sought after asset classes in Asia Pacific.

Getting Access to Shanghai and Beijing

LaSalle is buying the two properties as a set from an unnamed e-commerce firm, marking the eighth acquisition for the fund, which began raising capital in the second quarter of 2019.

The first property is a Grade A warehouse located in Tianjin’s Wuqing district, a satellite market of Beijing, which is 35 kilometres the capital’s Daxing Airport and around 80 kilometres from the city centre.

The second warehouse is located in Suzhou Industrial Park, an established development area located 65 kilometres west of central Shanghai. LaSalle did not release details of the two properties or the financial consideration involved. The fund manager already has three Tianjin properties in its China warehouse portfolio, with another three in Suzhou, including one in the same industrial park.

“These well-located facilities are an excellent fit for LCLV and highlight our ability to seize opportunities to expand our portfolio through the acquisition of high-quality assets,” said Claire Tang, head of Greater China at LaSalle. “Modern logistics facilities have been a key investment focus for LaSalle, and the market fundamentals for China logistics remain compelling.”

In the Urban Land Institute’s Emerging Trends in Real Estate – Asia Pacific 2021 report released late last month, real estate professionals polled for the survey named logistics facilities as the second-most favoured niche asset class, ranking warehouses behind only data centres as the specialised property type with the most favourable investment prospects for the coming year.

$1B Fund Already Beyond Target

LaSalle, which currently manages over $4 billion of logistics investments across Asian markets including China, Japan and Korea, reached a $681 million first close on the LCLV fund in April of this year, announcing at the time that it intended to raise a total of $1 billion for the vehicle.

In late September, the fund manager notified the US Securities and Exchange Commission (SEC) that it had raised another $379 million for LCLV, bringing total equity for the vehicle to nearly $1.1 billion, although LaSalle has yet to call a final close.

In October LaSalle announced that it had completed three warehouse facilities in the Yangzte river delta region of eastern China – one each in Shanghai, Suzhou and Jiaxing, a Zhejiang province city bordering China’s commercial capital.

That set of projects added 194,000 square metres to the company’s mainland logistics portfolio, with 73 percent of the space pre-leased, according to a statement by LaSalle at the time.