GLP Launches $5 Billion Fund to Target Logistics Properties in China

GLP, a Singaporean warehouse developer, launched a $5 billion fund to target logistics properties spread throughout China, investing not just from its previous partners but also from insurance powerhouses AIA and Allianz.

   Workers sort packages at a logistics facility in Hengyang in China's central Hunan province on ... [+] November 12, 2018. An e-commerce boom in the country has fueled robust demand for logistics real estate.  
  STR/AFP via Getty Images
 A booming e-commerce industry in China has fueled strong demand for logistics real estate. This is especially true for the area around Hengyang, where workers sort packages at a logistics facility on November 12, 2018.

GLP has created a $5 billion fund focused on logistics properties across China, which is supported by existing as well as new investors including insurance giants AIA and Allianz, with the help of the Singaporean warehouse developer

The new fund—GLP China Income Partners V—recapitalizes a portfolio of assets developed by GLP China Logistics Fund I, which had been set up in 2013 with $1.5 billion from institutional investors. The properties comprise 54 prime logistics facilities with a combined gross floor area of over 5 million square meters across 27 key locations in China.

"GLP CIP V is a significant milestone for our business, and it could not have been possible without the hard work and dedication of our team to create a coveted portfolio in one of the most sought-after real estate asset classes," said Teresa Zhuge, executive vice chairman of GLP China. In a statement on Wednesday, Zhuge further stated: "Logistics continues to prove its resiliency and strong growth potential, and we look forward to continuing to create value for our investors over the long term."

E-commerce companies and third-party logistics providers have been the main tenants in the recapitalized assets, according to GLP. The e-commerce sector grew rapidly when people stayed at home during the pandemic, and online shopping became popular.

Chinese billionaire Zhang Lei’s Hillhouse Capital, HOPU Logistics Investments, and GLP cofounder and CEO Ming Mei are among the investors backing GLP, which operates in Brazil, China, Europe, India & Japan. The company has more than $120 billion in assets under management including logistics real estate and renewable energy facilities.

The GLP recapitalization comes on the heels of rival warehouse developer ESR Cayman's