Singapore Wealth Fund GIC, GLP Create $2 Billion Fund in China

The new fund will buy income-producing logistics facilities in China as the sector continues to benefit from high consumption through e-commerce.

Shanghai skyline (Luke MacGregor/Bloomberg)

Shanghai skyline

(Luke MacGregor/Bloomberg)

Singapore’s sovereign wealth fund GIC and real estate investment manager GLP are creating a $2 billion fund that will buy logistics facilities in China.

The venture will focus on income-producing facilities, according to a statement Tuesday from GLP, which develops and operates logistics assets. GLP China will manage the fund and contribute seed capital.

High consumption growth, particularly in e-commerce, will keep driving demand for high-quality logistics properties in China, according to GIC’s chief investment officer for real estate, Lee Kok Sun. GLP says its real estate fund business is one of the largest in the world, spanning 62 million square meters (667 million square feet) globally.

“This fund provides long-term capital to further strengthen our dominant network in China,” Ming Mei, GLP’s co-founder and chief executive officer, said in the statement. “We continue to see significant customer demand for our integrated logistics solutions and look forward to continuing to build our relationship with GIC.”

GLP, which has more than $50 billion of assets under management across real estate and private equity, said the firm is committed to expanding its fund management business by establishing new investment pools.

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In May, GLP announced its first pool investing beyond real estate, the RMB10 billion ($1.45 billion) Hidden Hill Modern Logistics Private Equity Fund. The firm said at the time it was the only fund in China dedicated to investing in logistics.

The investment pool is managed by Hidden Hill Capital, GLP China’s private equity unit. China Post Capital is among the institutional investors that contributed capital to the Hidden Hill fund, according to the announcement.