A Chinese warehouse developer invested by the Carlyle Group and Singapore’s Temasek Holdings last week got ready to put $300 million of that capital to work on a major new logistics facility in Wuxi aimed at serving demand from China’s ecommerce industry.
According to a statement from the company, Yupei Group held a signing ceremony to kick off a 600 mu (40 hectare) distribution project, Wuxi Yupei Ecommerce Logistics Park, in Wuxi’s Xishan district.
Yupei Putting Private Equity Funding into New Projects
The project in Wuxi, a city of more than 6 million people less than an hour’s train ride west of Shanghai, is the fourth new project initiated by Yupei in the last six months, after it received investment from Carlyle last year and from Temasek in April of 2014.
Yupei’s other new projects in recent months have included a groundbreaking for a new facility in Zhengzhou in Henan during June; a new $300 million deal for a development in Changzhou, Jiangsu and a project in Tianjin during September; and a deal for a new logistics park in Chongqing announced in October.
Ecommerce Helps Drive Demand for More Logistics Space
In its statement, Yupei said that its new logistics park will be the biggest ecommerce shipping facility in southern Jiangsu province.
The rapid growth of China’s online shopping sector has helped drive demand for larger and more efficient logistics facilities, and fueled interest from international investors in developing warehouses in China.
Yupei received $250 million in investment from Temasek Holdings and Hong Kong-based private equity firm RRJ Capital during April of this year, after announcing a $400 million partnership with Carlyle last year.
In a November 2013 research report, real estate consultancy JLL found that ecommerce growth has been a major driver of China’s warehouse development boom, and investors have been attracted by the sectors consistent nine percent average investment yields.