PGGM has boosted its investments in Chinese logistics, committing a further $160m (€148m) to a strategy managed by the recently merged Asian logistics companies e-Shang and The Redwood Group.
The Dutch pension fund asset manager has now invested $430m in the strategy following an initial €95m investment in 2012 on behalf of the PGGM Private Real Estate fund and a further $144m in 2014.
Thijs Schoenaker, senior investment manager at PGGM Private Real Estate, said: “Over the past years, they have built up a sustainable and high-quality portfolio and platform in China.”
As reported last month, e-Shang and Redwood are merging to create one of Asia’s largest sector specialists.
The rebranded e-Shang Redwood (ESR) will have more than 3.5m sqm of projects in China, Japan and South Korea.
Schoenaker said the merger would further strengthen the platform and add value for customers in Asia.
“As a result, PGGM is keen to continue to invest with ESR, as one of our strategic operating partners in Asia,” he said.
Redwood has been targeting Chinese logistics on behalf of the fund in a “develop and hold” approach since the fund’s inception in 2012.
Charles de Portes, president at ESR, said the company was capturing the “strong momentum” of logistics real estate growth in China.
“PGGM’s increasing investments with us in the region since 2012 have proven timely for long-term value creation,” he said.
“[It] continues to be a key investment partner and now holds more than $600m of equity commitments with ESR across China and Japan.”
Dutch pension fund group APG paid $650m for a 20% stake in e-Shang in 2014.
E-Shang last year established a joint venture with APG and the Canada Pension Plan Investment Board via its Kendall Square Logistics Properties subsidiary, to invest $500m in South Korea.