China Vanke said to be in talks to join bid for GLP

A development by China Vanke under construction. The residential developer, one of the largest in China, has been expanding its presence in warehouse properties since forming a logistics venture with Blackstone in June 2015. Last year, Vanke bought 1
A development by China Vanke under construction. The residential developer, one of the largest in China, has been expanding its presence in warehouse properties since forming a logistics venture with Blackstone in June 2015. Last year, Vanke bought 10 logistics property projects.PHOTO: BLOOMBERG

Chinese home builder could link up with consortium to invest in warehouse operator

HONG KONG • China Vanke, a logistics partner of Blackstone Group in China, is in talks to join a management-backed consortium bidding for warehouse operator Global Logistic Properties, people with knowledge of the matter said.

One of them said that the Shenzhen-based home builder has discussed becoming one of about six major investors in the Chinese bidding group backed by Hopu Investment Management, Hillhouse Capital Management and GLP's chief executive officer.

The exact number of investors and the stakes they will hold in the consortium have not been set yet, the person said, asking not to be identified because the information is private.

Vanke, one of China's largest residential developers, has been expanding its presence in warehouse properties since forming a logistics venture with Blackstone in June 2015.

Last year, Vanke bought 10 logistics property projects with a planned gross floor area of about 991,000 sq m, according to its annual report.

"Having a slice of GLP will help Vanke boost its logistics business in China very fast," said Ms Regina Yang, head of research and consultancy at Knight Frank Shanghai.

"Logistics properties have become attractive commercial property assets with returns higher than retail and offices."

GLP, which has a market value of about US$10 billion (S$14 billion), said last week it asked shortlisted bidders to submit firm proposals by June 30.

Blackstone and a separate Warburg Pincus consortium are also among suitors that were selected to proceed in the bidding, people with knowledge of the matter said earlier.

Blackstone's logistics venture with Vanke has projects in the Chinese cities of Guiyang and Wuhan totalling around 185,000 sq m, according to an interview with the private equity firm last year posted on its website.

The US firm's logistics partnership with Vanke is not an exclusive arrangement and the two parties can work with others in the industry, one of the people with knowledge of the matter said.

No final decisions have been made, and the make-up of the bidding groups could change, the people said. Yesterday, GLP shares rose as much as 1.7 per cent and closed 1.37 per cent higher at $2.96.

Representatives for Hopu and Blackstone declined to comment, while a representative for Vanke said the company has no information to disclose. Hillhouse director of investor relations Xu Xiaoning could not be reached immediately for comment.

A takeover of GLP would be the largest mergers and acquisitions deal in Singapore since Thai billionaire Charoen Sirivadhanabhakdi's purchase of Fraser & Neave in 2013, according to data compiled by Bloomberg.

GLP's logistics assets would allow an acquirer to take advantage of a boom in demand for warehouse space in Asia from e-commerce companies such as Alibaba Group and JD.com.

GLP said in December that it hired JPMorgan Chase to advise on a strategic review requested by its largest shareholder, GIC.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on June 17, 2017, with the headline 'China Vanke said to be in talks to join bid for GLP'. Print Edition | Subscribe