​Ivanhoé Cambridge, CBRE GIP back follow-on Logos joint venture

Ivanhoé Cambridge and CBRE Global Investment Partners have teamed for their second investment with Logos to lift their investment in China to $800m (€718m).

The two investors are each putting $400m into the newly established Logos China Logistics Venture.

In 2014, the equal partners invested $400m in the Logos China Logistics Club.

John Marsh, joint managing director and co-founder of Logos, told IPE Real Estate the first venture was fully committed.

“This follow-on venture will acquire about $400m of logistics facilities, which Logos China will build in Shanghai and neighbouring cities,” he said.

“We are consolidating our strategy to service Shanghai, where demand for high-quality logistics space is still very strong.”

There is a shortage of investment-grade logistics areas in the Greater Shanghai area, he said, which “continue to experience strong economic growth.”

Adrian Baker, managing director for Asia Pacific at CBRE GIP, told IPE Real Estate: “Logos has established an attractive pipeline of logistics assets to acquire and develop in and around Shanghai.”

Baker said CBRE GIP first went to China a decade ago to invest in retail but that the market segment had since been affected by growth in e-commerce.

“Some of the most successful malls five or 10 years ago are no longer successful because consumers now shop online,” he said. 

“We are avoiding retail at the moment to access China’s consumer growth through logistics because retail carries more execution risk.”

The stabilisation time of logistics is also shorter compared with retail assets, Baker said.

“Generally,” he added, “a retail mall takes 3-5 years to stabilise.”

Rita-Rose Gagné, executive vice-president for growth markets at Ivanhoé Cambridge, said the new Logos China venture supported Ivanhoé Cambridge’s plan to increase exposure to Shanghai logistics hubs.

Logos has identified an attractive portfolio of existing assets and development opportunities for its partners, she said.

Ivanhoé Cambridge, a real estate subsidiary of the Caisse de dépôt et placement du Québec, and Australia’s Macquarie Capital became shareholders in Logos in March this year.