Global logistics giant GLP has clinched RMB 7.6 billion ($1.05 billion) for the final close of its sixth China income fund, GLP China Income Fund VI (GLP CIF VI), according to an announcement on Monday.
Under the portfolio of GLP CIF VI are 20 stabilised and income-producing logistics properties with 2.13 million square metres in total leasable area, which are rented out to e-commerce, logistics, and retail companies across 19 cities in China. Investors in the fund include leading domestic insurance companies and other existing GLP institutional investment partners.
While the amount raised for its precursor fund, GLP China Income Fund V (GLP CIF V), was undisclosed, the closing of GLP CIF VI represents about a 40% increase from its fourth fund closed in November 2021.
The sixth instalment is part of the 2019-vintage China income series that focuses on rental warehouses with stabilised income, with GLP China acting both as the fund and asset manager.
The announcement comes less than four months after GLP launched GLP CIF V through a $5-billion recapitalisation of assets under its flagship USD-denominated GLP China Logistics Fund I (GLP CLF I).
Established in 2013 as GLP’s first China-focused fund for the sector, GLP CLF I was managed with a develop-to-core strategy with $1.5-billion capital commitments from institutional investors. Backed by Asia’s largest insurance company, AIA Group, and real estate investor Allianz Real Estate, among many others, the fund made a graceful exit following the setup of GLP CIF V.
“The closing of GLP CIF VI affirms our ability to raise capital from new and existing investment partners seeking stable returns from our income fund series,” said Teresa Zhuge, executive vice-chairman of GLP China.
“As part of our progressive transition to an asset-light and capital-efficient business model, we continue to adopt a flexible and disciplined approach to execute on our asset monetisation and capital recycling plans. We aim to maximise value for our investors through active asset management underpinned by our emphasis on sustainability.”
Last Tuesday, S&P Global stated in a release that it had revised its rating outlook on GLP and GLP China from stable to negative as the utilisation of its balance sheet to fund material related transactions has accentuated financial risks. The credit rating agency also pointed to the macroeconomic backdrop, including the reset of yield expectation from offshore investors, investment appetite, and China’s zero COVID policy as factors that could delay GLP’s monetisation of assets and eventually prolong GLP’s adoption of asset-light model to beyond 2023.
GLP, which operates across Brazil, China, Europe, India, Japan, the United States, and Vietnam, has raised $13.3 billion in equity for its logistics funds year-to-date. Its China-dedicated unit has swallowed up logistics assets worth $45 billion in assets under management in China with a combined gross floor area of over 49 million square metres.