China’s Suning, govt-led Shenzhen Capital close second logistics fund

Existing Suning.com Plaza in Nanjing, China. Source: Suning.com

A real estate fund management subsidiary of Chinese government-led Shenzhen Capital Group has joined hands with Suning Logistics, the logistics arm of electronics retailer Suning Holdings Group, to set up a billion-yuan fund for equity investments in the logistics real estate industry.

Shenzhen Capital Group did not disclose the specific size of the new fund in a statement released on its WeChat official account last Friday, but the two companies initially targeted to collect no more than 2.6 billion yuan ($370 million), according to a document Suning filed with the Shenzhen stock exchange on November 19.

The fund reported having raised 2.093 billion yuan ($297 million) as of the filing date. Suning Logistics and its subsidiaries contributed 51 per cent of the total capital to the new fund, while Shenzhen Capital Group and affiliated firms committed to the rest 49 per cent, shows the same document.

The investment vehicle is the second of a series of funds backed by Shenzhen Capital Group and Suning, which plan to garner an aggregate of 30 billion yuan ($4.26 billion) for equity investments in the logistics real estate field in China.

Including the new fund, the duo already raised 7 billion yuan ($995 million) across two funds, and completed investments in “high-standard logistics and storage areas” that cover over 1.5 million square metres (16.15 million square feet) across eastern China’s Yangtze River Delta region, Greater Bay Area, and regions highlighted in the country’s Belt and Road initiative, said Shenzhen Capital Group in the  statement.

The predecessor fund was closed in 2018 with 5 billion yuan ($711 million) in capital commitments.

The previous two funds will partner and share resources with the following funds to “speed up the construction of key logistics assets in strategic cities,” said Shenzhen Capital Group in the statement. “Amid the rapid expansion of assets under management, [these funds] will build an integrated network of warehousing logistics infrastructure and related services for the retail industry in China.”

Shenzhen Capital Group and Suning are setting up the series of funds as the Chinese third-party logistics market was valued at $240.6 billion in 2018, up 17.1 per cent compared to a year earlier, according to China’s iResearch Consulting Group.

The burgeoning market is led by the distribution needs of e-commerce giants like Alibaba, JD.com and Pinduoduo, who are increasing the demand for storage and delivery.

JD.com’s property management division, for example, patterned with Singapore’s sovereign wealth fund GIC in February 2019 to launch a fund for investments in warehousing facilities in China. The fund has recorded a committed capital of 4.8 billion yuan ($698 million) as of February 2019.

Alibaba as well invested an addition of 23.3 billion yuan ($3.31 billion) in Cainiao this November, raising its stake in the warehousing and shipping company from 51 per cent to 63 per cent.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.