Dutch pension manager APG Asset Management has invested additional equity in its development joint venture with e-Shang, the Shanghai-based logistics developer, owner and operator. PERE can reveal that the two firms have agreed to invest a combined total of $285 million to further expand the development of logistics properties in China.
The fresh equity injection is expected to aid e-Shang in funding a development pipeline valued at in excess of $1 billion.
APG is understood to own a significant majority stake in the joint venture partnership, which was formed early last year, but its exact equity allocation is not known. In May 2014, APG invested $650 million in e-Shang, of which a larger component was invested in the JV. The remainder comprised the purchase of a 20 percent stake in the company itself, sufficient for APG to gain a seat on the company’s board, according to an earlier PERE article.
On the additional equity investment, Sachin Doshi, managing director and head of private real estate investments, Asia-Pacific, at APG said: “We are delighted to expand our successful relationship with e-Shang. We continue to see enormous opportunities in the Chinese logistics sector, now having fully invested our first tranche of capital with e-Shang to high quality developments across China’s main logistics markets.”
Jeffrey Shen, chief executive officer of e-Shang further added: “The logistics sector is currently at the forefront of enabling the transformation of China from a manufacturing to a consumption based economy. Building on the strong momentum of the JV since APG’s first investment last year, this equity upsize further validates e-Shang’s best-in-class platform and allows us to further capitalize on the rollout of our development pipeline in the near term.”
Started in 2011 with venture capital backing from Warburg Pincus, e-Shang currently owns 16 operating assets across China with over 14 million square feet of logistic facilities, along with 7.5 million square feet of gross floor area currently under development. APG’s partnership with e-Shang was also preceded by the firm receiving $120 million in “pre-IPO” financing by Goldman Sachs in December 2013.
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