HANGZHOU - A Singapore supply chain management company has linked with a Chinese e-commerce logistics services firm to expand their businesses in South-east Asia and beyond.
YCH Group and Shanghai-based Forchn Holdings signed a deal on Tuesday (April 24) that centres on a transfer of assets.
YCH would sell 13 of its logistics real estate assets in China, India and countries in South-east Asia to EC World Reit.
The Reit is managed by EC World Asset Management, an indirect wholly owned subsidiary of Forchn Holdings. Forchn is also the Reit's sponsor.
The assets, with an estimated value of $400 million, will expand the Reit's portfolio beyond China.
After the acquisition - which is still subject to further negotiations and regulatory approval - YCH would continue to lease and operate the assets.
The deal also involves Forchn transferring a "significant stake" of EC World Asset Management to YCH. This would also include board representation.
Neither company revealed the size of YCH's share in the Reit's manager.
YCH Group executive chairman Robert Yap told The Straits Times that this is "just a start" and the aim is for the Reit to build a portfolio spanning an entire network across China, South-east Asia and other Belt and Road countries.
"It will be a formidable portfolio," he said.
Forchn Holdings chairman Zhang Guobiao said both companies are leveraging their respective strengths to expand in South-east Asia.
"Our expertise is in e-commerce logistics, and we can use YCH's extensive network and channels to enter South-east Asia," added Mr Zhang.
"There are also many Chinese companies running industrial parks and factories in the region, and together we can offer a comprehensive set of services combining YCH's supply chain management solutions and our e-commerce logistics offerings to them."
Both companies also announced on Tuesday that they will launch a US$150 million Forchn-YCH Belt Road Initiative (BRI) Logistics Real Estate Private Equity Fund in the second half of 2018.
The fund will invest in warehousing and logistics assets in key cities across the Belt and Road countries.
The BRI is an ambitious plan launched by Chinese President Xi Jinping in 2013 to connect China with the rest of Asia, Africa and Europe through a series of infrastructure projects.
It involves building roads, railways, ports and industrial parks along two ancient Silk Road trade routes on land and sea.
Senior Minister of State for Trade and Industry Sim Ann witnessed the signing in Hangzhou on Tuesday.