GLP sets up US$7b fund to expand logistics facilities in China

A property in the eastern city of Urayasu that belongs to Global Logistic Properties.
A property in the eastern city of Urayasu that belongs to Global Logistic Properties. PHOTO: GLOBAL LOGISTIC PROPERTIES

SINGAPORE - Mainboard-listed Global Logistic Properties Ltd (GLP) said on Tuesday it plans to set up its second and largest China-focused logistics infrastructure fund, with seven investors, with the aim to pump in up to US$7 billion (S$9.6 billion) in the sector in the next four years.

GLP, the biggest provider of modern logistics warehouses in China, said its partners will include some of the world's largest national pension and sovereign wealth funds from Asia, North America and the Middle East. GLP and its partners have already committed US$3.7 billion of equity to the fund, in which GLP China will hold a 56 per cent stake and which it will manage.

The new fund, CLF II, is expected to develop 13 million square meters of facilities, and GLP will start acquiring land later this year and begin construction in April 2016.

GLP's first US$3 billion China development fund, launched in November 2013, has reached its investment capacity. Its customers include JD.com and Alibaba Group.

Mr Ming Mei, GLP's chief executive officer, told Reuters in an interview on Monday that the company itself has invested US$2 billion in China in the year ended March, and targets to invest at least 30 per cent more in the current financial year.

He added that China's booming e-commerce industry faces a shortage of modern warehouse facilities, and GLP estimates only 20 to 30 per cent of the country's warehouses are categorised as modern with fully computerised tracking systems and the latest technology.

"Despite all the news headlines about GDP slowing down, retail and consumption continue to be quite strong, and also e-commerce will continue to grow and penetrate second- and third-tier cities," he was quoted as saying.

He added that existing customers will account for two-thirds of the company's new storage facilities in China.

GLP operates in 36 Chinese cities and has 11.8 million square meters of completed logistics warehouse space as of the end of March. It is also a provider of logistics facilities in Japan, Brazil and the United States.

With CLF II, GLP said its fund management platform expands 36 per cent to US$27.1 billion.

Five of the new fund investors are from Asia, one from North America and one from the Middle East. Of the seven, four investors are partners in GLP's first China fund, CLF I, and two are new to GLP's fund management platform.