APG invests $650m in Warburg Pincus-backed e-Shang

APG and e-Shang - which was founded in 2011 by two local entrepreneurs in conjunction with Warburg Pincus - will also establish a joint venture to build modern logistics real estate assets across China.

"With the continued growth of third party logistics, e-commerce and the evolution of domestic consumption patterns combined with a severe shortage in the supply of modern logistics facilities, we strongly believe that the logistics real estate sector in China will be a long term beneficiary of these trend," Sachin Doshi, APG's head of non-listed real estate for Asia-Pacific, said in a statement.

Shanghai-based e-Shang currently owns over 1.5 million square meters of completed and ongoing projects, developing institutional-quality warehouses as well as providing logistics services in Shanghai, Beijing, Guangzhou and a number of second-tier cities.

The company is positioned to more than triple the size of its portfolio over the next several years with the plan of an eventual IPO, said Jeffrey Perlman, an executive director at Warburg Pincus.

E-Shang has raised more than $1 billion in equity capital since inception, including $120 million in pre-IPO financing from Goldman Sachs last December.

A number of PE investors are looking to capitalize on the logistics opportunity created by growing domestic consumption and e-commerce in China and the shortage of infrastructure required to deliver goods to customers.

Last month, RRJ Capital and Temasek Holdings agreed to invest $250 million in Chinese logistics player Shanghai Yupei Group, supporting the nationwide rollout of its warehouse network. The funding round followed a $200 million investment last year by The Carlyle Group and The Townsend Group.

Hopu Investment Management also became of a consortium that agreed to invest $2.5 billion in Global Logistic Properties (GLP), a Singapore-listed warehouse operator largely owned by GIC Private with interests in China, Japan and Brazil.

In November 2013, GLP announced a $3 billion China-focused logistics infrastructure fund.

Alibaba Group is investing aggressively in the space. It committed HK$2.8 billion ($360 million) in Haier Electronics Group to expand the group's logistics and distribution network and also set up the China Smart Logistic Network, also known as Cainiao Network Technology, in partnership with five logistics providers.

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• Topics
• Greater China
• Real estate
• Support services
• Logistics
• Joint Venture
• Warburg Pincus Asia
• Consumer
• China
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