Shanghai-based real asset platform DNE Group has formed a $1.2 billion joint venture with an Asian institutional investor to invest in the country’s life science parks, PERE can reveal.
With a core-plus to value-add return expectation, the vehicle will be focused on assets catering to life science research and development in tier-one Chinese cities, while a small portion of the capital can also be invested in life science manufacturing facilities. The vehicle is expected to be used to acquire and develop three to four projects.
The vehicle is understood to have been seeded with a high-spec core life science park located in Shanghai’s life science cluster, Shanghai Zhangjiang Science City. The asset, which is valued at $600 million, was previously owned and operated by solely by DNE.
DNE is the entity created by a merger between Chinese industrial park platform D&J China and logistics platform New Ease China at the end of 2021. Prior to the merger, both platforms were backed by private equity real estate manager Warburg Pincus and Chinese real asset veteran Sun Dongping. The two remain shareholders in DNE post-merger.
The firm focuses on new economy real asset investments and has assets under management valued at more than $15 billion. Including its exposure in life science, DNE has total gross floor area of about 129 million square feet across multiple sectors in China, including logistics, cold storage, modern manufacturing parks, urban development and data centers. Last year, the group formed a $1 billion Chinese logistics joint venture with Canada’s QuadReal Property Group.
Sun Dongping, chairman and chief executive officer of DNE, said in a release seen by PERE that “the growing pursuit of health and life quality has seen a flourishing life science industry” and has created “booming demand” for high-spec life science parks. It is understood that the firm has been developing and investing in life science infrastructure since 2015, starting with biotech hubs in Shanghai.
The growing demand for life science facilities in China has attracted notable global institutional investors to pursue related opportunities in the country. Dutch pension manager APG Asset Management made its debut life sciences real estate investment in Asia-Pacific with healthcare specialist CBC Group last year. The investor committed close to $500 million in CBC China Life Science Infrastructure Venture.