GLP’s New Income Fund to Target Chinese Logistics Assets

December 2, 2019 | Private Equity, Real Estate

GLP is a global investment manager, and business builder in logistics, real estate, infrastructure, finance, and related technologies.

GLP is launching its new RMB15bn (US$2.1bn) Chinese logistics fund. The GLP China Income Partners Fund will focus on properties generating a stable income stream and recycle capital.

A group of top domestic institutional investors is backing the new GLP China Income Partners Fund.

GLP operates across Brazil, China, Europe, India, Japan, and the U.S. The firm has US$86 billion in assets under management in real estate and private equity funds.

The new fund will acquire approximately 3 million sq ft of modern logistics assets across 20 Chinese cities.

Blackstone bullish on logistics

In June this year, Blackstone agreed with GLP to acquire logistics assets from three of GLP’s U.S. funds for a purchase price of $18.7 billion. This overall transaction totaled 179 million square feet of urban, infill logistics assets.

Ken Caplan, Global Co-Head of Blackstone Real Estate, commented: “Logistics is our highest conviction global investment theme today, and we look forward to building on our existing portfolio to meet the growing e-commerce demand.”

A sign of the times: Alibaba has a laser focus on logistics

Last month, e-commerce giant Alibaba pumped in RMB 23.3 billion ($3.3 billion) in Cainiao, its logistics affiliate. It thereby raised its equity in the warehousing and shipping company from 51 percent to 63 percent. Alibaba thinks that logistics is an integral part of its ability to deliver top-tier customer service and provide seamless online and offline shopping.

Primavera Capital Group, which recently raised $3.4 billion in a China fund, also invested in the Cainiao Smart Logistics Network.

On Singles Day this year, Alibaba received 1.3 billion orders and sold RMB 268 billion in goods — up 26% on last year.

In May 2018, Jack Ma said the group would invest RMB 100 billion in logistics over the next five years.

Chinese logistics market

Meanwhile, latest data showed China’s logistics industry continued to post steady growth in the first ten months of this year. According to the China Federation of Logistics and Purchasing (CFLP), The total value of social logistics in the January-October period grew 5.8 percent year on year to 244.4 trillion yuan (34.7 trillion U.S. dollars). Further, the Logistics Performance Index scaled 54.2 percent in October, up 0.4 percentage points from September. The growth in the index indicates expansion in the market.

It, therefore, augurs well for GLP that despite the gloom surrounding the US-China trade dispute, the logistics sector in China is steady.

GLP’s logistics fund is, therefore, likely to be quickly deployed.

GLP’s new logistics fund: capital recycling

“The establishment of GLP China Income Partners I is consistent with GLP’s strategy to further expand its fund management platform through establishing new funds and increasing its capital recycling initiatives,” said Teresa Zhuge, executive vice chairman of GLP China.

[Related Story: Nuveen Real Estate Buys 100 New Logistics Properties in 12 Markets  ]

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December 6, 2019

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