China Logistics Investment Venture Completes $800M First Close

LOGOS, Ivanhoé Cambridge, Bouwinvest and a Gulf Cooperation Council-based investor move forward with a fourth fund in anticipation of a rebound in the market following the coronavirus.
Shanghai. Image via

In anticipation of a return to normalcy in China’s post-COVID-19 commercial real estate market, LOGOS, Ivanhoé Cambridge, Bouwinvest and a Gulf Cooperation Council-based investor wrap up the first close of LOGOS China Logistics Venture 4 with $800 million in investment capacity. The new venture will focus on developing premier logistics and industrial facilities in core locations serving Greater Beijing, Shanghai and Guangzhou, as well as certain markets in China’s Midwest region.

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Venture 4’s projects will focus on attracting third-party logistics and industrial tenants that need to reach the area’s domestic consumption and e-commerce markets. The investment vehicle will begin activity upon the stabilization of the Chinese market in the aftermath of the coronavirus. Already, the partners have set their sights on opportunities for acquisitions within the coming months.

LOGOS et al are hoping for a repeat performance with Venture 4, based on the success of the preceding three vehicles. LOGOS China Logistics Venture 3’s equity commitments have nearly reached completion, with a current portfolio of 11 assets totaling approximately 11.8 million square feet. Venture 4 marks the GCC-based investor’s entrée into the partnership.

Light at the end of the tunnel

LOGOS and partners cite the resilience of LOGOS’ portfolio during COVID-19 as a harbinger of China’s capacity for a strong recovery and therefore, a suitable time to commence Venture 4. All signs point to a rebound in the industrial real estate market down the road. “The e-commerce and logistics sectors will likely emerge as major long-term beneficiaries from the coronavirus outbreak,” according to a survey from Colliers International. Of the real estate developers and online retailers queried for the survey, 24 percent of respondents anticipate that online sales will rise in the range of 0 to 15 percent year-over-year in 2020, and 31 percent see the figure increasing 15 percent or more.  

“While the crisis may lead to short-term pains, the change of spending patterns from the coronavirus should translate to a larger customer base for online retailers and logistics operators,” according to the Colliers report. “Senior citizens who were previously tech-phobic, and so out of reach for e-commerce, are now embracing online shopping for fresh food and other products because they cannot go out. In addition, pent-up demand from suppressed consumers points to a strong recovery in retail and e-commerce demand in H2.”