APG, CPPIB join e-Shang in $500m Korea logistics venture
Canada Pension Plan Investment Board (CPPIB) and Dutch pension fund manager APG Asset Management will establish a logistics-focused joint venture in South Korea with e-Shang, a Chinese warehousing operator backed by Warburg Pincus.
According to a release, the venture will be funded initially by equity investments totaling $500 million, with an option to increase capitalization to $1 billion. Its aim is to buy and develop a portfolio of high-grade logistics real estate assets across South Korea, building on investments made so far by e-Shang's Seoul-based subsidiary Kendall Square Logistics Properties (KSLP).
The JV aims to acquire a logistics real estate portfolio of over 1.5 million square meters within the next several years. Management at e-Shang expects plan to take advantage of expected interest in warehouse consolidation and efficiency in distribution centers across South Korea in the medium term.
This is the second partnership that APG has entered into with e-Shang; the two established a joint venture last year to build modern logistics real estate assets in China. APG also paid $650 million at the time for a 20% stake in the company.
Since its founding in 2011 by two Chinese entrepreneurs, in conjunction with Warburg Pincus, e-Shang has grown to operate more than 20 e-commerce, retail and cold storage distribution centers across China and Korea, representing more than 2.5 million square meters of space in operation and under development.
Warburg Pincus has pursued a similar strategy in India, where it formed a joint venture with real estate developer Embassy Group this October to build industrial parks with warehousing facilities in several key cities. In addition to these logistics investments, the firm has made a number of commitments to internet and e-commerce-related businesses.
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