Singapore-based asset manager Keppel Capital has launched its inaugural China-focused logistics property fund with an initial equity commitment of 1.4 billion yuan ($217 million), according to an announcement.
The fund, which will be managed by Keppel Capital’s wholly-owned subsidiary Keppel Capital China, will invest in developing high-quality logistics assets in key logistics hubs in China, including those in Greater Beijing, Greater Shanghai, and the Greater Bay Area.
A pipeline of potential assets has been identified for the collaboration between the fund and a Chinese logistics property developer. It also has an option to upsize by another 1.4 billion yuan by the end of this year.
The fund seeks to tap into China’s rapidly expanding demand for quality logistics facilities, which is driven by rising domestic consumption and e-commerce.
Keppel said the fund will invest in the development of assets in China, which would meet the strong demand for high-specification logistics facilities that are connected to established supporting infrastructure, such as major transportation hubs.
“Through the fund and our collaboration with our local logistics property partner, we look forward to delivering modern logistics facilities for key cities in the Chinese market,” said Keppel Capital CEO Christina Tan.
China’s logistics sector has been expanding rapidly in recent years. The COVID-19 pandemic has accelerated the growth of online marketplaces, which in turn further spurred the demand for logistics facilities from third-party logistics, e-commerce, and retail companies, according to Keppel Capital.
Other companies that have recently raised China-focused logistics funds include GLP, which closed its GLP China Income Fund I at around $2.1 billion in April, and US real estate investment manager LaSalle Investment Management, which raised $379 million for its LaSalle China Logistics Venture in September.
CITIC Group’s investment vehicle, CITIC Capital, has also teamed up with a unit of SF Holdings to launch a $308 million fund for logistics properties in China.
Keppel Capital is the asset management arm of Keppel Corporation, one of Singapore’s flagship multinational companies with a global footprint in more than 20 countries. The debut China-focused logistics property fund adds to Keppel Capital’s approximately S$37 billion ($28 billion) of assets under management.
The firm’s portfolio includes real estate, infrastructure, and data centre assets in key global markets. In 2020, Keppel Capital raised close to $4.5 billion, including commitments from large global institutional investors, reflecting the strong demand for real assets.