Warburg Pincus-backed logistics platform New Ease has entered a partnership with Canadian pension fund manager QuadReal Property Group to invest in and develop logistics properties in Chinese cities, with a total equity commitment of up to $1 billion.
The partnership, called New Ease Gold Development LP, will be seeded with a plot in Suzhou, just west of Shanghai, which New Ease and QuadReal expect to develop into a regional distribution centre for new-economy enterprises, supporting logistics demand in the area, according to a statement from New Ease.
“We are excited to partner with QuadReal, a leading global investor with deep industry insight,” said New Ease founder and chairman Sun Dongping. “New Ease is committed to providing the essential infrastructure for the new economy customers and we look forward to creating sustainable long-term values for all our stakeholders.”
The agreement with QuadReal, which manages the real estate portfolio of British Columbia pension fund giant BCIMC, is the logistics specialist’s second major tie-up with a global institution this year, while for its Canadian partner, the deal represents its first China specific investment since setting up shop in Asia Pacific in 2017.
QuadReal on the Delta
The seed project for the partnership is planned as a three-storey ramp-up facility with a gross floor area of 140,000 square metres (1,506,947 square feet), with the partners intending to build a portfolio of warehouses in top-tier cities in mainland economic hubs.
To date, nearly all of New Ease’s projects have been in the Yangtze River delta, including warehouse facilities in the Jiangsu province cities of Nanjing, Changzhou, Changsha and Kunshan, as well as in Shanghai’s Jiading district. The company also has a pair of projects in Wuhan.
The undertaking is QuadReal’s second major logistics real estate investment in Asia Pacific, after the firm teamed up with its French-speaking compatriots from Ivanhoe Cambridge to invest $800 million in an India joint venture led by Logos Property in 2017.
More recently the British Columbians, who are led regionally by former ADIA executive Peter Kim, had worked with ARA Asset Management, which now controls Logos, to jointly acquire a Melbourne office development valued at A$330 million ($218 million).
Fresh Capital for New Ease
For New Ease, this latest venture marks its second partnership with a public fund manager so far in 2021 after the company established a joint venture with Singapore’s GIC to invest in industrial and logistics real estate in Shanghai at the start of this year, according to people familiar with the investment.
During 2020, New Ease also notched a deal each with partners from the US and the UK. In May of last year, the company inked a $600 joint venture agreement with JP Morgan, after having signed a $200 million partnership with London-based Actis in January.
Since being co-founded by Sun and Warburg Pincus in 2018, New Ease has acquired, developed and managed a portfolio of over 5 million square metres of logistics projects now in operation or under development. The firm has assets under management of $5 billion.
“We will continue to execute on the identified pipelines, and expand the portfolio with more quality assets, providing a platform for investors to access institutional-quality opportunities in top-tier markets in China,” Sun said.
ESR Co-Founder Still in Sheds
New Ease was the third major industrial real estate venture founded by Sun to receive backing from Warburg Pincus.
In 2011, Sun, Warburg Pincus and Jeffrey Shen co-founded what is now known as ESR, the Hong Kong-listed logistics titan with operations in Greater China, Southeast Asia, South Korea and Australia.
In 2014, Sun once again worked with the US private equity firm in establishing D&J China, an industrial developer focused on building workshops and R&D facilities.
In 2016, D&J bought a 40 percent stake in Cheng Hei-ming’s Kailong, and in 2017, Warburg Pincus led a $180 million Series D investment in D&J.