Global logistics leader Prologis has announced the formation of its $1.7-billion new open-ended Prologis China Core Logistics Fund and an increase in its total development capacity to over $3.5 billion, it said in a statement.
The development capacity expansion comes from an additional commitment of $882 million by Prologis and HIP China Logistics Investments Ltd into the Prologis China Logistics Venture 3.
The additional commitment, along with leverage, will allow the venture to develop logistics assets worth $3.5 billion in the country, which is witnessing strong e-commerce growth and warehousing demand.
The new core fund, PCCLF, will invest in operating logistics properties in the firm’s target markets in China. The fund has raised RMB 3.1 billion ($445 million) and will acquire the existing portfolio of assets from Prologis China Logistics Venture 1 of approximately 2 million sq m with a fair value of RMB 12.3 billion ($1.7 billion).
Prologis will maintain its ownership percentage and HIP will continue to be a major investor in PCCLF.
“China represents the largest consumption opportunity in the world, with a sophisticated and rapidly-growing e-commerce market,” said Prologis chief investment officer Eugene F. Reilly. “Our strategy in China is to invest in the highest-quality logistics assets located in the most important consumption markets in the country.”
As of September 30, 2019, Prologis had $111 billion of assets under management, including $58 billion in its nine co-investment ventures globally.