GLP completes large part of Chinese capital injection

The Singapore-listed developer and fund manager has raised the first $1.6 billion of the $2.5 billion mega-commitment into its China platform from domestic investors.

Global Logistic Properties (GLP), the Singapore-listed developer-cum-fund manager, has just completed the raising of a first tranche of its $2.5 billion capital injection into its Chinese platform from domestic investors. The second tranche is expected to be completed in the next six months, according to a firm statement.

This first tranche consists of a $1.48 billion investment in the holding company for GLP’s China assets, which will give the investors a 24.4 percent stake; and also a $163 million investment in GLP’s listed entity in Singapore, giving them a 1.5 percent stake. Participating investors include Bank of China Group, China Life Insurance, as well as China-focused investment manager HOPU Funds, which is representing China Investment Corporation and the $10bn Russian government-backed Russian Direct Investment Fund among others.

As part of this first tranche, founding partner and chairman of HOPU Fenglei Fang has been appointed a non-executive and non-independent director of GLP’s board and member of GLP’s investment committee, as was planned. He assumed his duties on June 6.

“[Fang’s] rich experience and strong domestic network greatly enhance GLP’s position… in China,” Kong Hua Ang, chairman of the GLP board, said in the statement. “With the support of our new Chinese strategic partners, we are confident of taking our business to the next level.”

The second tranche of the investment, up to $875 million also in the China platform specifically, is expected to be closed in the next six months. Once the second tranche is completed, the investors will hold a maximum stake of 34 percent in the China holding company.

Last year, GLP also raised a $1.5 billion blind-pool fund for its China operations. However, GLP’s co-founder and chairman Jeff Schwartz told PERE previously that this subsequent investment was purposely not structured as a fund because a fund does not ensure a continued alignment of interest.

“We thought it was critical for our business to have the who’s who in China as our investors. Raising capital is not the issue – with this we get strategic relationships that can give us access to the best customers and companies,” as well as better access to land, he said.

In the five weeks following the announcement of this deal in February, GLP secured no less than eight partnerships and leasing agreements in China, totaling approximately 55.5 million square feet of new developments and 2.9 million square feet of leases throughout the country, and has since signed several more.