RRJ, Carlyle-backed logistics player targets $434m HK IPO

China Logistics Property Holdings (CNLP) will sell 1.04 billion shares for a maximum price of HK$3.25 apiece, according to a filing. As much as HK$1.71 billion of the offering will be covered by cornerstone investors, including property developer Sino-Ocean Group, LR Capital and a unit of Anbang Insurance Group. LR was set up by several family business groups in Greater China and Canada, and involves Soul Htite, co-founder of financial technology start-ups Lending Club and Dianrong.

Carlyle and US-based investment firm The Townsend Group invested $200 million into joint ventures with Yupei in 2013, while RRJ and Temasek subscribed to $250 million in convertible notes issued by the company in 2014. Last year, RRJ and Temasek re-upped by agreeing to lend Yupei another $250 million, which included a $5 million commitment from US-based Mousse Partners.

Over the past two years Yupei has restructured its business in preparation for an offshore listing. This will enable its PE backers to transfer or convert the majority of their holdings into equity in the IPO vehicle and thereby achieve liquidity. Following the offering, RRJ will hold a 19.16% interest in CNLP, with Carlyle and Temasek owning 10.87% and 3.05%, respectively.

Yupei was founded in Shanghai in 2000 by Shifa Li, who is the chairman and majority shareholder of CNLP. He will retain a 26.55% interest on listing.

The company claims to be a leading provider of logistics facilities in China with approximately one million square meters of gross floor area (GFA) in operation nationwide as of March. This comprises 59 facilities in 12 logistics parks across eight provinces and municipalities. It had a further 1.1 sqm of GFA under development and 900,000 sqm of land held for future projects. In addition, CNLP has 32 investment agreements covering 34 logistics parks with a combined GFA of 3.6 million sqm.

Revenue for 2015 came to RMB163.2 million, up from RMB67.5 million the previous year, while the fair value of its investment properties rose from RMB421.1 million to RMB2.67 billion. These contributed to an operating profit of RMB1.84 billion in 2015 - up from RMB242.1 million in 2014 - and an increase in net profit from RMB147.8 million to RMB1.2 billion over the same period.

Just under half of CNLP's revenue comes from third-party logistics providers, with e-commerce companies contributing 27.2% and other tenants 23.3%.

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 have attracted a significant amount of interest, with the likes of e-Shang, Global Logistics Properties and Goodman all raising capital to support China expansion.

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• Topics
• Greater China
• Industrials
• IPO
• Infrastructure
• Real estate
• Logistics
• Exit
• China
• The Carlyle Group
• RRJ Capital
• Temasek Holdings