Vanke said in talks to join China Consortium in GLP bidding

[HONG KONG] China Vanke Co, a logistics partner of Blackstone Group LP in China, is in talks to join a management-backed consortium bidding for warehouse operator Global Logistic Properties Ltd, people with knowledge of the matter said.

The Shenzhen-based homebuilder has discussed becoming one of about six major investors in the Chinese bidding group backed by Hopu Investment Management, Hillhouse Capital Management and GLP's chief executive officer, according to one of the people. 

The exact number of investors and the stakes they will hold in the consortium haven't been set yet, the person said, asking not to be identified because the information is private.

Vanke, one of China's largest residential developers, has been expanding its presence in warehouse properties since forming a logistics venture with Blackstone in June 2015.

Last year, Vanke bought 10 logistics property projects with a planned gross floor area of about 991,000 square metres, according to its annual report.

"Having a slice of GLP will help Vanke boost its logistics business in China very fast," Regina Yang, head of research and consultancy at Knight Frank Shanghai, said by phone.

"Logistics properties have become attractive commercial property assets with returns higher than retail and offices." 

GLP, which has a market value of about US$10 billion in Singapore, said last week it asked shortlisted bidders to submit firm proposals by June 30. Blackstone and a separate Warburg Pincus consortium are also among suitors that were selected to proceed in the bidding, people with knowledge of the matter said earlier.

Blackstone Venture

Blackstone's logistics venture with Vanke has projects in the Chinese cities of Guiyang and Wuhan totaling around 185,000 square metres, according to an interview with the private equity firm last year posted on its website. The US firm's logistics partnership with Vanke isn't an exclusive arrangement, and the two parties can work with others in the industry, one of the people with knowledge of the matter said.

No final decisions have been made, and the makeup of the bidding groups could change, the people said. GLP shares rose as much as 1.7 per cent in Singapore Friday, while the benchmark Straits Times Index increased 0.5 per cent.

Representatives for Hopu and Blackstone declined to comment, while a representative for Vanke said the company has no information to disclose. Xu Xiaoning, a director of investor relations at Hillhouse, couldn't immediately be reached for comment.

A takeover of GLP would be the largest M&A deal in Singapore since Thai billionaire Charoen Sirivadhanabhakdi's purchase of Fraser & Neave Ltd in 2013, according to data compiled by Bloomberg.

GLP's logistics assets would allow an acquirer to take advantage of a boom in demand for warehouse space in Asia from e-commerce companies such as Alibaba Group Holding Ltd and JD.com Inc.

GLP said in December that it hired JPMorgan Chase & Co to advise on a strategic review requested by its largest shareholder, sovereign wealth fund GIC Pte.

BLOOMBERG