GLP, the Singapore-headquartered logistics and technology company, has established a new China real estate fund with its long-time partner, the Singapore sovereign wealth fund GIC Private, PERE has learned.
The two partners will target a total of $2 billion in assets under management for the new fund, GLP China Value-Add Venture II, once it is fully invested and leveraged. GIC has a significant stake in the fund, although its specific equity commitment was not disclosed.
The investment represents GIC’s first investment since selling its shares in GLP as part of the company’s privatization process, which was completed in January. GIC was the single-largest shareholder of GLP, with a 36.84 percent stake, and requested a strategic review of the firm at the end of 2016. In July 2017, GLP, which had been listed on the Singapore Stock Exchange since 2010, announced its sale to an investor consortium that was led by Ming Mei and also included Hopu Investment Management, Hillhouse Capital, Bank of China Group Investment and Vanke Group.
CVA II follows GLP’s first China value-add fund, CVA I, which was launched in February and is focused on the acquisition of income-producing logistics properties in China. CVA I also has a single investor, China Life Insurance, and has total equity commitments of $1.6 billion. However, while CVA II is US dollar-denominated, CVA is denominated in yuan, with assets under management of 20 billion yuan ($3 billion; €2.5 billion).
“Each fund is structured specifically for the needs of the institutional partner that is investing alongside GLP,” a company spokesman said, explaining the fundraising strategy. “We design the funds as exclusive vehicles to ensure they do not conflict with other funds that have been established.”
As with CVA I, GLP will contribute seed assets to CVA II, with the fund’s portfolio to be rounded out with acquisitions from third parties and GLP.
“This fund provides long-term capital to further strengthen our dominant network in China,” said GLP chief executive Ming Mei.
GLP is the largest owner and operator of logistics facilities in China with an approximately $20 billion portfolio spanning approximately 334 million square feet. GLP’s footprint in the country is larger than its next 10 competitors combined, according to a company spokesman.
“We believe high-consumption growth, particularly of e-commerce, will continue to drive demand for high-quality logistics properties in China,” said Lee Kok Sun, chief investment officer of GIC Real Estate. “This venture will enable to us, as a long-term value investor, to capitalize on the structural growth of the logistics sector in China.”
Prior to the formation of the CVA funds this year, GLP had raised and invested development funds in China, including GLP CLF I, which was established in November 2013 and is expected to reach $3 billion in AUM, when fully leveraged and invested. GLP CLF II followed in July 2015 and has a target AUM of $7 billion. Both are commingled vehicles: CLF I was backed by six limited partners from North America, Europe and Asia, while its successor received capital from seven investors from North America, Asia and the Middle East.