RRJ consortium commits $250m to China warehousing player

This follows a $250 million commitment to Yupei in April of last year from RRJ and SeaTown Holdings, a unit of Temasek Holdings. The consortium in this round is said to be broader, with participation from leading institutional investors in North America and Singapore.

The new funding will be used for working capital to build more than 7 million square meters of net leasable logistics space in China over the next three years.

"With the rapid development of e-commerce and fast growing domestic consumer demand, we have seen the huge demand for modern and high-end warehousing facilities," James Liu, a managing director at RRJ, told AVCJ. "Since our investment last year, the company has demonstrated great performance in project development and growth. We are confident about its management's ability to execute and scale up."

Founded in 2000, Yupei is currently developing warehouses with more than 3 million sqm of net leasable area. Its operational portfolio includes 60 facilities with a gross floor area of up to 5 million sqm. These warehouses are located in major logistics hubs across China, including the first-tier cities such as Shanghai, Beijing and Guangzhou, as well as the second-tier cities including Shenyang and Wuhan.

The Carlyle Group and the US-based investment firm The Townsend Group previously invested $200 million to acquire stakes in five warehouses owned by Yupei and build an additional 12 properties over a two-year period.

Spurred by a lack of high-quality supply and rising demand from retail customers, private capital is flooding into China's logistics sector - coming directly from sovereign wealth funds and pension funds as well as through private equity funds. Warehousing providers and third-party logistics players are popular targets.

Warburg Pincus supported two local entrepreneurs in the formation of e-Shang in 2011 and the company has since received follow-on funding from Goldman Sachs and Dutch pension fund APG. Hopu Investment Management and Boyu Capital, meanwhile, led a consortium of Chinese investors that committed $2.5 billion to Singapore-listed Global Logistic Properties (GLP).

GLP and Goodman also have joint ventures and fund management structures with a string of institutional investors. Prologis is also getting involved, receiving backing from Abu Dhabi Investment Authority to develop a China logistics platform.

RRJ, which was set up in 2011 by Richard Ong, formerly of Goldman Sachs and Hopu Investments, reached a final close of around $3.5 billion on its second fund last year. It now has $5.9 billion in assets under management across two funds, with investments in China, Southeast Asia, Europe and North America.

The PE firm is currently in the market with its third fund and is understood to be targeting at least $4 billion.

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• Topics
• Expansion
• Industrials
• Greater China
• Infrastructure
• Real estate
• RRJ Capital
• Growth capital
• Logistics
• Infrastructure
• China
• Real estate