At a time when capital is showing unprecedented enthusiasm for investing in China's logistics assets, Gaw Capital Partners seems to be lacking in interest.
During the Chinese New Year, Gaw Capital Partners announced a payment of more than RMB2 billion (about 2.0 billionUS$800 million), a portfolio of three mainland logistics assets. These include two industrial parks in Jiangmen, Guangdong Province and a logistics park in Xi'an, Shaanxi Province.
It is said that the buyer is Ping An of China. The Chinese insurance giant is currently expanding its real estate capital portfolio.
As early as November 2023, news came out that its subsidiary, Ping An Haikong, was interested in taking over Blackstone's logistics asset portfolio in China, including 11 logistics parks worth more than 10 billion.
Gaw Capital Partners did not disclose details of the underlying assets, the identity of the purchaser or the status of the joint venture with Allianz and Veyron. However, in two announcements from Ping An Life on February 19, the above transaction has been confirmed.
It is understood that Ping An Life acquired 100% of the shares of Heshan Henergy Commerce and Trade Weilong Chain Management and other companies to achieve the purpose of holding 100% of the assets of two stably operating logistics parks located in Heshan, Jiangmen and Pengjiang, Jiangmen. Behind a series of actions such as industrial and commercial changes and loans, Ping An Life holds the above two major logistics parks in Jiangmen, involving an amount of as much as 9800 million yuan.
It is understood that Heshan Henergy is building the Weilongzhuxi Smart Logistics Industrial Park located in Heshan, Jiangmen, with a total construction area of 250,000 square meters and a total investment of 1$200 million. Among them, a modern logistics warehouse with a construction area of 210,000 square meters was built, which was officially put into operation in July 2021, and the Shein cross-border e-commerce project was introduced to lease all the storage area.
According to public information, Weilong Pengjiang mainly operates the Weilong (Jiangmen) Large Consumption Chain Industrial Park located in Pengjiang, Jiangmen, with a total construction area of 820,000 square meters, which will be used to build an industrial first-chain service center, a new retail industry purchase and sales center, a first-chain financial and settlement center, etc., and is planned to be built into a demonstration park for the commercial and logistics hub of consumer goods in the Greater Bay Area.
It is also understood that on December 22 last year, Ping An Life Insurance completed the industrial and commercial change procedures for the warehousing service of Anhua Weilong (Xixian New Area), holding 100% of the shares of Anhua Weilong, and the registered capital of Anhua Weilong is 4900 million yuan.
According to the data, the Xi'an Qinhan Logistics Park held by Anhua Weilong is located in Tiangong 3rd Road, Xianyang New District, Xi'an City, with a total construction area of 160,000 square meters and eight single-storey warehouses.
Due to the original acquisition of an unknown underlying asset**, Gaw Capital Partners' past investments in China have an average yield of 142%, which would be a remarkable transaction if the underlying assets could achieve this level of return, and Gaw Capital Partners would have completed the exit of its first logistics asset in the partnership.
Gaw Capital Partners has been active in China's logistics real estate market for nearly 10 years.
In 2014, Gaw Capital Partners established a joint venture with Italian logistics and warehousing developer Velong China to acquire, develop and manage modern warehousing and logistics facilities in the Chinese market.
It is understood that when the joint venture was initially established, the two parties aimed to build a portfolio of assets totaling 1 million square meters (10.8 million square feet) and $1 billion in value.
According to the official website of Gaw Capital Partners, since the establishment of the Gaw Weilong Logistics Cooperation Platform eight years ago, the two parties have jointly established 3 ** teams, with a total fundraising scale of 15$1.5 billion, invested in nearly 40 projects with a total area of more than 4 million square meters. The 3 assets of this ** are among the investment projects.
It is worth mentioning that four years after the establishment of the Gaw Wei Long Logistics Cooperation Platform, it gave a 50% stake** to Allianz Real Estate (then known as "Pimaco Prime") in Germany. As a result, Allianz has acquired half ownership of five logistics portfolios in Shanghai, Jiaxing, Foshan, Wuhan and Shenyang, with a total leasable area of 3750,000 square meters. Gaw and Veron retain the remaining majority interest in the platform and continue to manage the underlying assets.
In recent years, there has been an increasing number of buyers interested in the logistics real estate business, looking for suitable investment opportunities in logistics assets. However, as "veteran players" in logistics real estate, Gaw Capital Partners and Weilong seem to have stopped increasing their investment since 2022. This may be related to Weilong's own adjustments.
In April 2023, Segro, a British industrial property investment trust**, acquired Veyron in its entirety. In May 2015, Segro acquired a majority stake in Veyron, becoming the largest shareholder of the latter.
Gaw Capital Partners itself seems to have other investment considerations as well.
As of Q3 2023, Gaw Capital Partners has $33.7 billion in global assets under management and has recently been investing outside of China, including data center projects in Indonesia and Malaysia, as well as Hyatt hotels and logistics assets in Tokyo, according to public information.
In China, in late 2023, Gaw Capital Partners is looking to consolidate some of the properties in the Cirothy Plaza commercial and office complex**, one of which is also home to the offices of Gaw Capital Partners' Shanghai team. This follows Gaw Capital Partners seeking to refinance an existing loan for a landmark supertall office building in China.
With this transaction, Ping An's logistics real estate assets have been further expanded.
Since the beginning of 2015, Ping An Real Estate has entered the field of logistics real estate in a big way. In 2018, GLP became a shareholder of Ping An Industrial Logistics and changed its name to "Amp Development", focusing on the investment, development and operation of logistics real estate. As of 2022, Ping An Industrial Logistics has 28 logistics parks across the country, covering an area of nearly 3 million square meters.
In the past two years, Ping An has been active again in the field of logistics investment. Previously, in November 2023, there were rumors in the market that Ping An Haikong, a subsidiary of Ping An of China, intended to acquire 11 China logistics parks under Blackstone. According to the news at the time, the two parties had signed a letter of intent to cooperate, and Ping An had also completed due diligence before signing the contract. However, the news has been denied by Ping An Maritime Holdings, and there has been no update on the relevant transactions since then.
If the transaction is finalized, it will significantly increase Ping An's logistics assets, and will also benefit the diversification and balance of real estate investment.
It is understood that the total construction area of the 11 logistics park projects proposed by Blackstone Group is about 2.2 million square meters, distributed in 11 cities such as Guangzhou, Wuhan, Nanjing, Changsha and Xi'an, and the current average occupancy rate is about 80%.
Of course, Ping An also has its own considerations in terms of real estate investment. According to the data, as of the end of September 2023, the balance of real estate investment in Ping An Insurance's capital portfolio was 2,0948.2 billion yuan, accounting for 45%。Although it has decreased by 3% compared to the same period in 2022, the proportion is still at a high level among other insurers.
In addition, in terms of engineering logistics investment business, Ping An Real Estate invests in industrial logistics park projects and cultivates project operations by means of independent investment and construction, third-party cooperative investment and construction or mergers and acquisitions, and transfers them to subsidiaries of Ping An Group for long-term holding at a reasonable premium after the project operation matures, and then entrusts the issuer with insurance funds to carry out the operation and management of the project.
From the perspective of considering the balance of risks, Ping An has gradually reduced its real estate investment since 2022. It is revealed that the main layout direction of real estate at present is more inclined to lease housing and other real estate that can generate long-term lease cash flow effects and meet the company's debt needs.
It is understood that at present, Ping An's real estate investment properties are mainly property investment (including direct investment and holding properties in the form of equity investment of project companies), accounting for 76 percent of real estate investment1%, mainly invested in commercial offices, logistics real estate, industrial parks, long-term rental apartments and other rent-collecting properties.
Nevertheless, for insurers, the potential of China's logistics real estate sector is gradually expanding. Savills has pointed out that in the past three years, buyers of logistics real estate have gradually turned into domestic investors, especially domestic insurance funds, and have begun to dominate investment in logistics assets. Since 2023, insurance companies have shifted their focus from residential real estate to logistics real estate, among which Taikang Insurance has acquired six domestic logistics park assets from ESR for about 2 billion yuan. Ping An is just one of them.