GLP, a global real estate logistics giant, has notched up $1.2 billion for the initial closing of its fourth China value-add logistics fund, accounting for 46% of its $2.6-billion fund size.
Sponsoring GLP China Value-Add Partners IV (GLP CVA IV) were GLP’s long-term institutional investment partners, including APG Asset Management, the investment vehicle of an eponymous Dutch pension fund, per a statement on Tuesday.
Like its predecessor funds in the same series, proceeds from the fundraise will be deployed on acquisition of logistics assets with value-add strategy, including cold storage conversion. GLP CVA IV is also looking to capture the ongoing deleveraging initiatives and market consolidation in China.
GLP China value-add logistics fund
| Launch year | Fund | Size | Limited Partner | Strategy | Domicile |
|---|---|---|---|---|---|
| 2017 | LP China Value-Add Venture I | $1.6 billion | China Life | Value-add | Onshore (RMB) |
| 2018 | GLP China Value-Add Venture II | $2 billion | GIC | Value-add | Offshore (USD) |
| 2020 | GLP China Value-Add Venture III | $675 million | Undisclosed international and domestic institutional investors | Value-add | Onshore (RMB) |
| 2022 | GLP China Value-Add Venture IV | $2 billion | APG Asset Management and others | Value-add | Offshore (USD) |
Source: GLP
The fund is currently seeded with assets in key logistics hubs in China with a total net leasable area of approximately 600,000 square metres.
“This is an opportune time to establish a China logistics value-add strategy that will capitalise on current market volatility,” said Teresa Zhuge, Executive Vice-Chairman of GLP China.
“GLP CVA IV is a new flagship fund backed by GLP’s unique sourcing network, leading market scale and highly experienced teams…” Zhuge added.
“We continue to believe in the long-term fundamental demand drivers of the China logistics market, including the overall growth of the sector through e-commerce and structural shifts in supply-chain management. A value-add approach in this current dislocated environment is an obvious way to capture value within this maturing asset class…” said Graeme Torre, head of real estate for Asia-Pacific at APG.
GLP CVA IV is the fourth instalment of GLP’s China value-add logistics platform, which made its debut in 2017 with insurer China Life as the sole sponsor of the $1.6-billion fund. GIC, a Singaporean sovereign wealth fund, is among other international and domestic institutional investors which have made equity commitment to the series.
The announcement comes two weeks after the logistics company announced the RMB 7.6-billion ($1.05 billion) final close of its sixth China income fund, GLP China Income Fund VI, earlier this month.
The same week, Wall Street rating agency Fitch Ratings downgraded GLP from BBB to BBB- for its long-term foreign-currency issuer default rating, senior unsecured rating, and $5 billion medium-term note programme and outstanding senior bonds’ ratings due to its unexpected large cash outflow and insufficient public filing.
“GLP’s ratings and leverage trajectory are reliant on its ability to maintain robust access to capital,” Fitch said in its rating action commentary.
“Access to the public debt capital market appears disrupted, as evidenced from a decline in bond prices, but the company has retained stable banking access and continued to raise funds from other sources, including partnering with sovereign, insurance and pension funds for asset monetisation.”
GLP’s global portfolio now stands at $115 billion in real estate and private equity assets under management across Brazil, China, Europe, India, Japan, the US, and Vietnam.