China’s Sino-Ocean Capital hits first close of logistics fund at $232m

Logistics in a warehouse.

Sino-Ocean Capital, the investment arm of Chinese property developer Sino-Ocean Group, has announced the first close of its modern logistics fund at 1.6 billion yuan ($232.6 million).

Sino-Ocean Capital managing director Lin Chuan believes that compared to developed markets, there are still gaps within China’s logistics market in terms of infrastructure, management, and information technology.

The fund has also made its first investment by leading a 300 million yuan ($43.6 million) round in Beijing-based seafood supply chain operator Xinliangji. Other investors that joined the round include Eastern Bell Capital and FreeS Fund.

“We have always explored methods to create breakthroughs in the industry and to do so, we have to focus on the supply chain of logistics in order to improve quality and efficiency. Our investment in Xinliangji is a good start,” he said.

Sino-Ocean Capital deputy general manager Fanming Zheng said he expects the modern logistics fund will hit its final close by end of the year.

In a statement, Xinliangji noted that it was the largest single round raised by a supply chain startup in China in 2019. Founded three years ago, the startup raised 50 million yuan and 120 million yuan in 2017 alone.

According to a report by South China Morning Post, Sino-Ocean Capital also plans to launch a 3 billion to 5 billion yuan ($436.1 million to $726.9 million) fund to acquire logistics properties, tapping into the growing demand for warehousing properties.

The investment arm has invested in nine logistics firms across China and is now seeking to strengthen its foothold in warehousing, as the market is currently facing a shortage of high-quality warehouse space.

Lin was quoted saying Sino-Ocean Capital targets to invest about 48 billion yuan ($6.9 billion) into logistics property in the next five years.

Last year, Sino-Ocean Capital partnered ZM Logistics to secure a massive industrial property in Chongqing. Subsequently, both parties jointly launched a 6 billion yuan ($872.5 million) cold chain warehousing fund to invest in the cold storage space.