AMB Property Corporation has launched a $588 million joint venture to target logistics development and acquisition assets in major China markets.
The San Francisco-based REIT and private fund manager said it would commit $88 million to the venture, with $500 million coming from HIP China Logistics Investments Limited. HIP is a specially-created entity established under Jersey corporation law on 23 February, however people familiar with the matter said HIP was a China-based real estate investment fund backed by international capital. AMB refused to confirm or name its institutional partner.
In a statement on the deal with HIP, Guy Jaquier, president of AMB’s Europe and Asia operations and president of the firm’s private capital arm, said China represented a “compelling investment opportunity,” adding that the HIP JV would target investments of up to $1.1 billion over the next four years. A majority of AMB's operating and under-development properties in China, including land, have been contributed to the venture, which will initially target region such as the Yangtse River Delta, the Bohai Bay Area, the Pearl River Delta and Western China. AMB added it had invested more than $1 billion of third-party equity to its global platform in the first quarter of 2011.
AMB operates 10 private investment vehicles in total, including two co-investment funds with Singapore sovereign wealth fund GIC Real Estate. In December, AMB also launched a new Brazil joint venture, Brazil Logistics Partners Fund I, with a major university endowment. The initial third-party equity investment for the Brazil Logistics Fund was approximately R$360 million (US$211 million), with the JV’s overall equity commitment R$720 million (US$422 million), including AMB's 50 percent co-investment.
Earlier this month, AMB also formed a €470 million joint venture with Allianz Real Estate targeting logistics deals in the Eurozone, in Allianz’s largest JV so far and biggest foray in the logistics space. Allianz is investing €400 million in the venture, while AMB will co-invest €70 million or 15 percent of the equity total.