Keppel Capital has launched a China logistics property fund to invest in developing high-quality logistics assets in key hubs in China.
China’s logistics sector has been experiencing a rapid expansion in recent years, especially with the acceleration of online marketplaces due to the Covid-19 pandemic.
The fund was launched alongside a global institutional investor, whose name was undisclosed in a Feb 2 statement.
The fund plans to invest in the development of assets in China which would meet the strong demand for high-specification logistics facilities.
This is Keppel Capital’s inaugural China-focused logistics property fund, and has an initial total equity commitment of about RMB1.40 billion ($288.3 million), with an option to upsize by a similar amount by the end of 2021.
Keppel Capital’s wholly-owned subsidiary Keppel Capital China will serve as the fund’s investment manager.
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The launch of the fund is in line with Keppel’s Vision 2030, which sees Keppel using its asset management arm to seize opportunities in providing solutions for sustainable urbanisation.
The fund will tap into the Keppel Group’s experience, network and expertise, as well as the expertise of a leading Chinese logistics developer and operator to undertake the development and operations of Grade-A logistics facilities across China’s key logistics hubs.
A pipeline of potential assets has been identified for the collaboration between the fund and the Chinese logistics property developer.
“Driven by rising domestic consumption as well as e-commerce, China’s demand for quality logistics facilities is expanding rapidly. Through the fund and our collaboration with our local logistics property partner, we look forward to delivering modern logistics facilities for key cities in the Chinese market, while also generating attractive risk-adjusted returns for our investors,” says Christina Tan, CEO of Keppel Capital.
The launch of the fund is not expected to have any material impact on the earnings per share (EPS) and net tangible asset (NTA) per share of Keppel Corporation for the current FY.
Shares in Keppel Corp closed 20 cents higher or 4.1% up at $5.10 on Feb 2.