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GLP to set up US$7b fund to expand logistics facilities in China
[HONG KONG] Singapore-listed Global Logistic Properties (GLP) said on Tuesday it plans to set up its second China-focused logistics infrastructure fund with seven investors, and aims to invest up to US$7 billion in the sector in the next four years.
GLP, the largest provider of modern logistics warehouses in China, said its partners will include national pension funds and sovereign wealth funds from Asia, North America and the Middle East. It said US$3.7 billion of equity has been committed to the fund, in which GLP will hold a 56 per cent interest.
China's booming e-commerce industry faces a shortage of modern warehouse facilities. GLP estimates only 20 to 30 per cent of the country's warehouses are categorised as modern with fully computerised tracking systems and the latest technology. "Despite all the news headlines about GDP slowing down, retail and consumption continue to be quite strong, and also e-commerce will continue to grow and penetrate second- and third-tier cities," Ming Mei, chief executive officer at GLP, told Reuters in a phone interview on Monday evening.
He said existing customers will account for two-thirds of the company's new storage facilities in China.
The company's new fund, CLF II, is expected to develop 13 million square meters of facilities, and GLP will start acquiring land later this year and commence construction in April 2016.
GLP's first US$3 billion China development fund, launched in November 2013, has reached its investment capacity. Its customers include JD.com and Alibaba Group.
Mei said GLP itself invested US$2 billion in China in the year ended March, and targets to invest at least 30 per cent more in the current financial year.
GLP operates in 36 Chinese cities and has 11.8 million square meters of completed logistics warehouse space as of the end of March. It is also a provider of logistics facilities in Japan, Brazil and the United States.