Dutch pension giant PGGM invests in China logistics fund

Dutch pension fund PGGM and Redwood Group Asia have announced the first closing of the Redwood China Logistics Fund following PGGM's decision to commit up to EUR 95 mln on behalf of its PGGM Private Real Estate Fund.

The fund aims to invest an initial RMB 2.5 bn (EUR 318 mln) of equity in distribution, logistics and light manufacturing real estate facilities in selected high growth markets in China. According to estimates from Jones Lang LaSalle, the Chinese industrial real estate market, which is currently undersupplied and underserviced, is expected to grow 8-9 times in size over the next decade.

Guido Verhoef, head of private real estate, and Thijs Schoenaker, senior investment manager at PGGM, jointly said: 'This investment fits well into the PGGM Private Real Estate Fund with its long-term investment policy. Our objective is to diversify our investments across different property types in respect to China. The "develop to hold" strategy provides us with exposure to a high-quality portfolio of income-generating assets. The logistics property investments are expected to benefit from strong economic growth, urbanization and consumption growth in China. We observe a strong need among companies to set up the supply chain in China.'

The fund will leverage Redwood’s local team's market knowledge and China development experience along with Redwood Asia's international distribution and logistics real estate development experience and global client relationships.

Charles de Portes and Stuart Gibson, president and CEO of Redwood respectively, pointed out in a joint statement that China is the fastest growing and most dynamic economy globally.

'It is experiencing an under-supply of efficient, high-quality distribution facilities to keep pace with the tremendous and growing demand. Improving the efficiency and quality of such air, sea, land and rail cargo distribution facilities will contribute directly to improving the supply chain and global competitiveness of logistics in the country. This in turn benefits not only international and domestic firms tied most directly to the rapid export and import growth in China or to vibrant domestic supply-chains, but contributes as well to the efficiency of the economy as a whole.'

PGGM is a leading Dutch pension fund service provider offering pension management, integrated asset management, management support and policy advice to its institutional clients. PGGM currently works on behalf of six pension funds, managing about EUR 125 bn of pension assets for 2.5 million people. PGGM works independently or with strategic partners to develop innovative benefit solutions combining pensions, care, accommodation and employment.

Founded in August 2006 by Charles de Portes and Stuart Gibson, the Redwood Group is an investor in and manager of real estate with top global institutional and governmental investors, particularly in the largest metropolitan areas of Asia.