Prologis, the San Francisco-based industrial real estate operator, developer and fund manager, has formed a second China joint venture with HIP China Logistics Investments, with a total of $588 million invested capital.
The Prologis China Logistics Venture 2 follows the investment strategy of its predecessor, which was formed in March 2011 under AMB Property Corporation before it merged with Prologis. The first joint venture has been renamed Prologis China Logistics Venture I, and Venture 2 will also focus on building, acquiring and managing logistics properties in its global markets in China, according to a Prologis statement.
“We are pleased to extend our relationship with HIP China Logistics Investments and are jointly committed to continuing our successful partnership in this new vehicle,” Gary Anderson, the chief executive of Prologis Europe and Asia, said in the statement. “With strong growth in consumption and a limited supply of Class-A distribution space, the Chinese logistics market continues to present compelling investment opportunities.”
The venture will have an investment capacity of $1 billion altogether, but Prologis declined to comment on how the equity of the venture was split. In Venture I, however, AMB committed $88 million of its own capital to the scheme while the remaining $500 million came from HIP China Logistics Investments.
HIP is a specially-created entity established under Jersey corporation law in February 2011. However, people familiar with the matter told PERE previously that HIP was a China-based real estate investment fund backed by international capital.
Although AMB refused to name the institutional partner behind Venture I at the time, PERE reported later that the Abu Dhabi Investment Authority was at least one of the significant equity partners behind the vehicle. The first venture is expected to run until March 2018, and will target investments up to a total of $1.1 billion.
With approximately $45 billion assets under management globally, Prologis currently owns or has investments in properties and development projects expected to total approximately 562 million square feet in 21 countries. Its Asia platform is divided between China, Japan and Singapore, and in China specifically operates 19 logistics centers.