China’s logistics, data centres get top billing as Goldman, Actis real estate funds join record rush into market

Transactions in logistics assets hit a record US$7 billion in 2020, according to DWS and Real Capital Analytics

Goldman, New Ease fund bought a collection of similar assets this month for US$488 million in latest sign of foreign buying

Reading Time:2 minutes

China’s booming e-commerce and digitisation are burnishing the appeal of logistics and data centres as an asset class. Photo: Shutterstock Images

Published: 7:30am, 28 Jul 2021Updated: 7:30am, 28 Jul 2021

Foreign funds are making a beeline for logistics and data-centre assets in mainland China as the coronavirus pandemic burnishes their appeal as a key property in the booming e-commerce industry.

Goldman Sachs Asset Management and New Ease, a new economy infrastructure investor, earlier this month jointly bought two collections of logistics real estate projects in gateway cities throughout China in a transaction worth US$488 million.

China logistics transactions reached a record of about US$7 billion in 2020, with 30 per cent being cross-border deals, according to DWS and Real Capital Analytics. Fundraising by China-focused logistics funds at US$7 billion in 2020, the most since at least 2011.

“There has certainly been a huge increase in investor interest in both logistics and data centres over the last three years, and especially since Covid-19,” said Thomas Liu, head of Greater China and North Asia real estate at Actis. “These have proven to be resilient sectors despite the overall slowdown” in the global economy.

Employees work at an airmail sorting and distribution centre of China Post in Guangzhou. Photo: Xinhua

More global investors are likely to enter the fray as the property market matures and delivers stable yield and returns, he added.

London-based Actis, with US$1 billion dedicated to Asian real estate, invests in the real estate sector across China, India, South Korea and Southeast Asia. It has 12 ongoing projects in the region, including five logistics warehouses and a data centre in China.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x