Global Logistic Properties (GLP), the Singapore-listed industrial real estate developer and fund manager, has established the largest China-focused logistics vehicle to date, with equity commitments totaling $3.7 billion.
CLF II was launched with an initial fundraising target of $3 billion, but was ultimately oversubscribed by 20 percent due to strong demand from investors. Indeed, GLP is also understood to have cut back some investor commitments. With leverage, the total investment capacity of CLF II has been estimated to be $7 billion.
Similar to the strategy of its predecessor, CLF I, the vehicle has been structured as a traditional commingled fund, but one in which the GP co-invests a substantial portion. In the case of CLF II, GLP holds a 56 percent stake, its largest co-investment in one of its own funds so far. The fund manager made a 51 percent equity commitment in CLF I.
CLF II is also more than double the size of CLF I, which had an investment capacity of $3 billion with leverage. The equity raised via CLF II has come from a total of seven global institutional investors, including pension funds and sovereign wealth funds. Five of these are Asia investors, one from North America and one from the Middle East. GLP further added in a statement announcing the fund launch that four were in fact repeat investors from CLF I.
“Building on the strong performance of CLF I, the successful closing of CLF II reflects the confidence of institutional investors in GLP’s proven track record as an operator, developer and fund manager,” said Ming Z. Mei, chief executive officer of GLP. “China remains our primary market for development. The fund management platform is an important source of capital for GLP and we remain focused on leveraging it to scale our business effectively while driving high risk-adjusted returns.”
Similar to the mandate of CLF I, GLP would invest in logistics development projects across China on behalf of CLF II. GLP is targeting to develop 13 million square feet of logistics properties via the fund’s investment capacity over a period of four years. It will start acquiring land for development later in this year and commence construction of new projects in April next year.
Real estate investment and advisory firm M3 Capital Partners advised GLP on the fund formation, while law firm Morrison & Foerster provided legal counsel.