GLP launches new US$2.1bn Chinese logistics fund

Warehouse investor and developer GLP has launched a new RMB15bn (US$2.1bn) Chinese logistics fund focusing on stabilised, income-generating properties, as the firm continues to recycle capital in the country.

The GLP China Income Partners fund is backed by a group of leading domestic institutional investors, with GLP China acting as the fund and asset manager, the firm announced.

China has become one of the most influential logistics markets globally due to increasing domestic consumption levels and its rapidly growing e-commerce and logistics sectors.

The fund launch comes just months after GLP finalised the sale of three US logistics funds to Blackstone for US$18.7bn in the largest-ever private real estate deal globally.

The new fund is GLP’s third vehicle to recycle capital in China and will invest in about 3m sq.ft. of modern logistics assets across some 20 cities.

The Chinese logistics market continues to attract institutional investors that are investigating the sector as a structural opportunity at this late cycle stage, according to CBRE.

Logistics rents were flat in most cities during Q3 2019, with rental performance expected to diverge between tier I and tier II cities as landlords in western and central regions continue to prioritise high occupancy over rents.

Vacancy edged up to 12% and supply is expected to peak this year, with Chengdu, Chongqing, and Tianjin accounting for the bulk of new supply.

“The establishment of GLP China Income Partners I is consistent with GLP’s strategy to further expand its fund management platform through establishing new funds and increasing its capital recycling initiatives,” said Teresa Zhuge, executive vice chairman of GLP China.

“Over the past two years, GLP China has raised nearly US$7bn of income funds, which is a testament to the continued confidence our investors have in GLP’s fund management strategy and operational capabilities.”

In September, GLP closed its landmark deal with Blackstone, which acquired 179m sq.ft. of urban, infill logistics assets across 36 major US markets.

GLP also raised US$600m in commitments from Allianz Real Estate, the property arm of the German insurer, for its logistics development funds in China and Japan in May this year.

GLP’s fund management platform will grow to US$86bn in assets under management following the GLP CIP I transaction.

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