Global Logistic Properties seeks to double US assets after buying IndCor from Blackstone

SINGAPORE (Bloomberg) - Singapore-listed Global Logistic Properties Ltd., the biggest modern warehouse operator in China, will look to double assets it manages in the U.S. after its first warehouse acquisition in the country from The Blackstone Group.

The company could add between US$5 billion and US$10 billion of assets in the U.S., from the current US$8 billion, Ming Mei, chief executive officer of Singapore-based GLP, said in an interview on May 14. The company completed the purchase of IndCor Properties from Blackstone for US$8.1 billion in February.

"If there are opportunities, we expect to continue to acquire more assets in the U.S.," Mei, 42, said in Singapore. "There are a couple of portfolios of assets in the U.S. that are worth looking at."

GLP is expanding its warehousing business in China and the U.S. as demand for industrial space grows from Web retailers, supermarkets and other customers. E-commerce in China is projected to reach US$1.01 trillion in 2018, from US$426.3 billion in 2014, according to EMarketer Inc.

The company is also planning to raise a US$3 billion fund from investors to develop new warehouse space in China, and an announcement will be made soon, Mei said, without elaborating.

GLP plans to increase its portfolio of warehouses in China, its biggest market, by 30 per cent in the fiscal year ending March 2016, Mei said. E-commerce companies are adding more space to meet the growing demand from consumers buying goods online, he said. E-commerce firms Alibaba Group and JD.com are GLP customers.

GLP shares, which have climbed 8.5 per cent this year, were unchanged at $2.69 in Singapore trading as of 10:52 a.m. The benchmark Straits Times Index is up 2.7 per cent on the year.

GLP will add space in second-tier capital cities with populations of 7 million to 10 million, Mei said. Such cities include Chengdu, Wuhan, Xian, Jinan, Changsa and Shenyang, he said.

The company expects demand for temperature-controlled facilities to grow, with space increasing 10-fold over the next three to five years, Mei said. The business currently makes up 2 per cent of GLP's total warehouse space, he said.

"I'm more confident about the mid- to long-term prospects for China than two to three years ago, when everyone said it was rosy," Mei said. "I'm putting my money where my mouth is."

That's because even as China's overall growth slows the economy is increasingly focused on consumer consumption, he noted. That's something that should drive demand for warehouse space, he said.

"People think Chinese people will save, save, save and not spend. They are talking about people born in the 1960s," he said. "The people born after the '80s are more American than the Americans. They don't only spend their own money, they spend their parents' money."