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To strengthen its bid for Singapore-based warehouse operator Global Logistic Properties (GLP), a management-backed consortium is trying to rope in Shenzhen-based property developer China Vanke Co. as one of its members, reported Bloomberg.
According to persons privy to the matter, China Vanke is in talks to become one of around six major investors in a Chinese bidding group supported by GLP’s CEO Ming Mei, Hopu Investment Management and Hillhouse Capital Management.
“Having a slice of GLP will help Vanke boost its logistics business in China very fast,” said Knight Frank Shanghai Research Head Regina Yang. She noted that logistics properties have become sought-after assets due to higher returns compared to office and retail space.
The acquisition of GLP, which is valued at around US$10 billion (S$ 13.85 billion), would represent the biggest M&A transaction in Singapore since Thai billionaire Charoen Sirivadhanabhakdi took over Fraser & Neave four years ago, based on Bloomberg data.
Its logistics properties would also let the new owner leverage on the growing demand for warehouse space in Asia from e-commerce firms like JD.com Inc and Alibaba Group Holding.
However, insiders pointed out that the exact number of investors and their respective stakes in the management-backed consortium have not yet been finalised. In addition, others noted that the composition of the groups vying for GLP may also change.
Last week, GLP revealed that it had instructed shortlisted bidders to submit concrete proposals by 30 June. These are said to include Blackstone and a separate consortium led by Warburg Pincus.
Vanke, one of China’s biggest housing developers, has been buying more warehouses since it has teamed up with Blackstone to form a joint venture focusing on this particular property in June 2015. In fact, it purchased 10 upcoming logistics projects with a combined gross floor area of about 10.7 million square feet last year.
According to Blackstone, its partnership with Vanke has projects in the Chinese cities of Wuhan and Guiyang with a total area of about 2 million sq ft.
Last Friday (16 June), the stock price of GLP increased by 1.7 percent compared to the 0.5 percent gain recorded by Singapore’s benchmark Straits Times Index.
This article was edited by Denise Djong.
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