Prudential affiliate PGIM Real Estate invests US$323 million in China’s buoyant logistics property market
- PGIM Real Estate is investing US$323 million together with its partner New Ease China to acquire logistics assets in Nanjing, Shanghai and Langfang
- China’s expanding e-commerce sector is attracting the attention of overseas institutional investors to logistics assets on the mainland
The robust growth in China’s e-commerce sector, which has vastly benefited from the rise in online shopping because of the coronavirus pandemic, is drawing overseas institutional investors to logistics assets on the mainland.
PGIM Real Estate, a unit of PGIM, the US$1.5 trillion global asset management business of New York-listed Prudential Financial, is investing US$323 million together with its partner New Ease China, to acquire logistics assets in Nanjing, Shanghai and Langfang.
“The properties are a significant boost to our regional portfolio due to their optimal locations and long lease tenures,” Benett Theseira, PGIM Real Estate’s head of Asia-Pacific, said on Wednesday. “We expect continued strong interest and liquidity for logistics assets in China, given the structural shift towards e-commerce. This shift will continue to fuel demand for quality assets in the right locations, supporting long-term growth across our portfolio.”
Logistics assets – warehouses, cold storage facilities, data centres and logistics centres – remain keenly sought after, especially by US and Singapore-based property funds, according to CBRE.
Active fundraising activity by mainland China-targeted logistics funds will ensure these groups emerge as major buyers this year, it said, adding China will continue to see foreign institutional investors form partnerships with local logistics developers.
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PGIM Real Estate’s first acquisition was a warehouse complex comprising 10 single-storey ambient warehouses in Nanjing, the capital of Jiangsu province, in eastern China. Currently 97 per cent occupied, the complex caters to e-commerce firms, third-party logistics providers and cold chain operators. The temperature in ambient warehouses has to be maintained at 27 degrees Celsius at all times.