CITIC, SF Holdings raise $308m China logistics fund

SF Holdings has committed RMB525 million to the vehicle and a further RMB1.47 billion coming from an entity controlled by Singapore’s GIC Private. CITIC is putting in RMB105 million. The initial plan was to raise a $350 million corpus, with SF Holdings and CITIC’s contributions capped at 30% and 10% of the corpus, respectively, according to a filing. The fund management entity is 50-50 owned by CITIC and SF Holdings, but CITIC gets 60% of the net management fees.

The fund – known as CC SF China Logistics Properties Investment Fund – will invest in first- and second-tier cities in China where logistics assets are scarce. SF Holdings will contribute seed assets and leaseback no less than 30% of the total rentable area of projects invested by the fund. It also has the first right of refusal on the entire portfolio should sales of individual assets prove difficult.

Investor interest in Chinese logistics is underpinned by strong growth in domestic consumerism, especially in online shopping, and the lack of suitable warehousing facilities to meet rising demand. Earlier this year, warehouse operator GLP closed its latest China logistics fund at RMB15 billion, while Prologis launched a $1.7 billion China vehicle at the end of last year.

ESR, a pan-Asian logistics and fund management platform that was established in China by Warburg Pincus in 2011, listed in Hong Kong last November. It is now trading at a 35% premium to its IPO price and has a market capitalization of HK$73.4 billion. Earlier this year, ESR formed a joint venture with GIC with a view to investing $500 million in high-quality facilities in China.

CITIC first invested in SF Holdings in 2013 and Yichen Zhang, the private equity firm’s chairman and CEO, remains a board member. The two companies established a cold chain business to supply McDonald’s China, a CITIC portfolio company, and CITIC served as manager for China’s first domestic logistics real estate investment trust (REIT), comprising two SF Holdings assets.

In March, CITIC joined CDH Investments and Legend Capital in subscribing to a $300 million convertible note issued by SF Freight, a spin-out from SF Holdings. The business specializes in less-than-truckload (LTL) shipping, a transportation service for relatively small loads.

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• Topics
• Greater China
• Fundraising
• Infrastructure
• Infrastructure
• China
• CITIC Capital
• Logistics