Goldman Sachs in China Warehouse JV with Sun Jade
After raised $3.5 billion earlier this year to invest in real estate opportunities globally, Goldman Sachs Asset Management is targeting the warehouse sector in China.
In a joint announcement today, the asset management division of white shoe investment bank Goldman Sachs said it had formed a joint venture with Shanghai-based developer Sun Jade to pursue investment opportunities. in logistics and other new infrastructure real estate assets in China’s first tier. surrounding towns and regions.
“Driven by economic expansion thanks to the continued acceleration of e-commerce, we are optimistic about the long-term growth prospects of the new infrastructure sector in China and around the world,” said Takashi Murata, head of Asia-Pacific real estate at Goldman Sachs Asset Management. .
Relatively low-key in the China warehouse world, since its inception in 2017, Sunjade has amassed a portfolio of 11 projects, both completed and under construction, measuring over 670,535 square meters (7.2 million square feet) according to its website. .
Shanghai Region Seed Portfolio
The joint venture partners begin their cooperation with an initial 240,000 square meter portfolio of four warehouse projects in the greater Shanghai area, according to the release, with additional capital committed for future acquisition and development opportunities.
“China’s growing share in global trade has led to significant growth in its e-commerce, industrial, smart logistics and big data sectors, driving demand for infrastructure,” said Song Guoqing, founder and CEO of Sun Jade. “Despite the economic uncertainty due to the ongoing pandemic, new infrastructure assets have shown resilience, reflecting their importance as a key part of China’s future development and engine of economic growth.”
Known in Chinese as 森瑶 (Senyao), all of Sun Jade’s projects are located in communities surrounding Shanghai in the Yangtze River Delta, including six in the cities of Kunshan and Suzhou in Jiangsu Province, and five in Jiaxing, Shaoxing and Ningbo in Zhejiang. .
Of the 11 projects in Sun Jade’s portfolio, eight completed assets contribute 473,831 square meters of the company’s total space, with three further developments covering 196,704 square meters still under construction.
The existing portfolio is primarily comprised of multi-storey logistics facilities, with and without ramps, with the company also managing some light industrial spaces. The two companies did not provide additional information about Sun Jade’s portfolio assets that were contributed to the joint venture.
Sun Jade’s Song previously co-founded a real estate company called Ambition (安必信), which served as a strategic partner for LaSalle Investment Management, according to Sun Jade’s website. Kelvin Zhou is also part of the Sun Jade team, who previously worked for Gaw Capital and ESR in China.
Sheds Generate Returns
The joint venture partners aim to capitalize on the growing demand for “new, high-quality infrastructure assets” in China, with a particular focus on warehouses.
Highlighting market drivers such as e-commerce, growing domestic consumption, improving infrastructure and diversifying industrial requirements supported by government policies, Goldman Sachs Asset Management and Sun Jade join a host of companies in warehouses seeking returns in China’s logistics sector.
Goldman Sachs Asset Management previously invested in China’s warehouse market in 2021, forming a $488 million joint venture with New Ease Chinawhich is now part of the DNE Group, to acquire a pair of distribution asset portfolios.
DNE Group received government approval in September to form The First Privately Sponsored Warehouse REIT in Chinapaving the way for the assets of its warehouse joint ventures to be listed on the Shanghai Stock Exchange.
While investor interest in China’s residential and office sectors has cooled as the country’s financial crisis deepens, warehouse businesses have remained steady, including Acquisition by Morgan Stanley of four Yangtze Delta logistics assets of Singapore’s SC Capital in the first half of this year.
In June, the world’s largest asset manager, BlackRock, increased its exposure to the logistics sector in China by partnering with local developer Chaintouch to begin developing a 190,000 square meter warehouse in Hebei Province, outside of Beijing.
Then in July, Singapore GIC creates a joint venture with ESR to purchase 873,000 square meters of logistics assets from developer-managed funds for $730 million.