China's JD Property closes $800m Series B
Warburg Pincus and Hillhouse Investment have re-upped in JD Property, the infrastructure property asset management arm of Chinese e-commerce giant JD.com, as part of a USD 800m Series B round.
The two private equity firms have committed to serve as lead investors in the round, alongside an unnamed leading global financial institution, according to a filing. Warburg Pincus and Hillhouse also led the USD 700m Series A last year. JD.com remains the majority shareholder.
Established in 2018, JD Property owns, develops, and manages warehousing and other logistics facilities, supporting the operations of JD Logistics. The company operates as a fund management platform, achieving scale by recycling profits from mature developments and into new projects.
In 2019, the firm established JD Logistics Properties Core Fund in conjunction with GIC. JD Property contributed 20% of the CNY 4.8bn corpus, with the rest coming from GIC. Shortly thereafter, JD.com agreed to sell completed modern logistics facilities with a gross asset value of approximately CNY 11bn to the fund as a means of unlocking balance sheet capital.
A second core fund – with accompanying balance sheet transfer – followed in 2020. There was also JD Logistics Property Development Fund I, a CNY 3bn vehicle launched with GIC and Mubadala Investment. Development Fund I is mandated to acquire uncompleted logistics facilities from JD.com. In certain cases, JD.com leases back facilities from the funds.
As of December 2020, JD Property was managing a portfolio with a gross floor area of more than 12m square meters, according to JD.com's 2020 annual report.
Last year, JD Property agreed to buy a 26.38% stake in Hong Kong-listed China Logistics Property Holdings (CNLP) from the company's founder, triggering a mandatory takeover offer for the entire business at a valuation of over $2 billion. RRJ Capital was among the investors set to exit. Several outstanding convertible bonds also had to be taken out as part of the transaction.
JD.com claims to be China's leading one-stop e-commerce platform with more than 570m active customers and revenue of CNY 951.6bn in 2021. It has previously spun out and listed two subsidiaries in Hong Kong – JD Health in 2020 and JD Logistics in 2021. Hillhouse was a significant pre-IPO investor in both businesses.
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