Deals

Redwood China inks Morgan Stanley AIP co-investment

The logistics fund manager has sealed its first China deal alongside Morgan Stanley’s multi-manager arm, with which it has committed all of its China capital raised so far.

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The Redwood Group, the Singapore-based logistics fund manager, has inked a built-to-suit development deal with Morgan Stanley Alternate Investment Partners (AIP) Real Estate, the multi-manager platform of Morgan Stanley, as a co-investor. The deal represents Morgan Stanley AIP’s first deal with Redwood in China.

The financial details of the deal were not disclosed, but PERE understands the total deal size to be between $50 million and $100 million, including debt. Redwood will act as the operating partner, and is building the 388,000 square foot facility for Daimler Northeast Asia Parts Trading and Services in the southern Chinese city of Guangzhou. Morgan Stanley has come in as a financial partner.

Construction for the first phase of development started last April, with completion expected by mid-2014. Daimler will also have the option of expanding with a second, 140,000 square foot warehouse later on, according to a Redwood statement.

This development represents Redwood’s fifth investment in China, and means that Redwood has now fully committed all of the €95 million it raised in a first closing for its China fund. Redwood held that first close in June 2012, with a large commitment coming from Dutch pension fund PGGM. A second close on this fund is expected sometime in the first half of 2014 and Redwood is targeting approximately $400 million for the fund overall. The firm is also in the midst of raising a fund for Japanese logistics real estate.

The deal also represents one of Morgan Stanley AIP’s first co-investment deals in Asia. At the end of 2012 the firm’s co-head of real estate Paul Vosper said he saw particular opportunities in co-investments, but was willing to undertake such investments primarily in the US and the UK. In May, however, AIP hired Jon Sandstrom to head its Asian real estate team which enabled to platform’s focus to expand.

Morgan Stanley AIP and Redwood declined to comment further than the statement.

Morgan Stanley AIP currently manages $30 billion across asset classes. It most recently launched a secondaries fund, the AIP Phoenix Global Real Estate Secondaries Fund II 2013, for which it has raised $48 million toward its $500 million goal so far, according to PERE’s Research and Analytics division.