Copenhagen-based PFA Pension has partnered with Canadian investor Ivanhoe Cambridge to invest in pan-Asia logistics operator LOGOS’s third China venture. The partnership is understood to mark PFA’s first direct investment into Chinese logistics.
LOGOS has raised $415 million in equity for the LOGOS China Venture 3, which includes its own commitment as well as equity commitments by PFA and Ivanhoe Cambridge. The specific allocation by each investor was not disclosed. Including leverage, the venture will have a total investment capacity of $830 million, according to an official statement.
PFA is a new investment partner for LOGOS and Ivanhoe in their Chinese logistics venture series. The first and second vehicles, called LOGOS China Logistics Club (set up in June 2015 with $400 million in investment capacity) and the LOGOS China Logistics Venture (set up in August 2016 with around $400 million in investment capacity), respectively had Ivanhoe and CBRE Global Investors as co-investors alongside LOGOS.
“The Chinese logistics sector continues to offer strong absorption and growth rates due to a long-term undersupply of modern logistics facilities. PFA has a strong conviction on the growth of the logistics sector in Asia and particularly in China,” said Michael Bruhn, head of real estate, for PFA Pension.
PFA, with DKK 500 billion ($78 billion; €67 billion) in assets under management, has been typically investing indirectly via funds in foreign properties. According to previous PERE reports, the investor is an anchor investor in Morgan Stanley Real Estate Investing’s (MSREI) maiden core property fund in Asia. PFA is understood to have invested between $150 million to $200 million in the vehicle as of January last year.
For LOGOS, its third venture will see the firm expand its investment mandate to develop and own modern logistics facilities beyond Greater Shanghai to north, east, south and mid-west China, to take advantage of the opportunities available in China on the back of compelling macro fundamentals, trade flow, and ecommerce growth.
Meanwhile the predecessor logistics vehicle, LOGOS China Logistics Venture, is expected to be fully deployed imminently. PERE understands that two logistics assets have been acquired via the partnership so far, while a further two are in the final stages of due diligence and one asset is expected to be acquired within the coming month.