CBRE GI, LOGOS form $800m Chinese logistics vehicle -Exclusive

The onshore yuan logistics vehicle has commitments from domestic and international institutional investors.

Los Angeles-headquartered CBRE Global Investors has partnered with the Sydney-headquartered logistics developer LOGOS Property group to raise onshore yuan to invest in Chinese logistics, PERE can confirm.

CBRE GI and LOGOS declined to comment on the partnership. But three sources close to the situation told PERE that the yuan-denominated vehicle raised $800 million in total commitments from three to four Chinese insurance companies and two offshore institutional investors in July. A final close will be held within the next two months.

The two firms had corralled $500 million to $600 million via a first close in March.

This partnership will pursue logistics development projects as well as invest in existing logistics assets in first and second tier Chinese cities. Through the development projects, the firms will be targeting a develop-to-hold, long-term investment strategy.

One of the sources said that the vehicle has already invested around 70 percent of the capital raised so far. The vehicle as a whole will aim to generate 10 to 11 percent net IRRs, according to another source.

This is not the first logistics partnership between CBRE GI and LOGOS in China. But in the previous two partnerships – both of which were offshore vehicles – CBRE GI was a co-investor alongside other institutions while LOGOS was responsible for managing the assets. The $400 million LOGOS China Logistics Venture 1 was established in 2015 and the $400 million LOGOS China Logistics Venture 2 was formed the following year, according to a PERE report. The capital raised from the two vehicles was used to acquire and develop logistics assets in Shanghai and the neighbouring cities. PERE can reveal that LOGOS China Logistics Venture 2 is close to being fully invested.

PERE understands that CBRE GI did not participate in the third follow-on vehicle, the $830 million LOGOS China Logistics Venture 3 formed in 2017, which has been investing in opportunities beyond Shanghai into north, east, south and mid-west China.

In this latest partnership, however, CBRE GI has assumed the role of a fund manager while LOGOS continues as asset manager.