SINGAPORE (July 21): Global Logistic Properties, the operator of modern logistics facilities, today announced the establishment of its largest logistics infrastructure fund, CLF II, to fund its expansion in China.

GLP, together with other investors, have committed US$3.7 billion ($5.1 billion) of equity to the fund, with leverage allowing for an investment capacity of US$7 billion to develop 140 million sf of logistics properties over four years.

“Seven leading global institutions, including some of the world’s largest national pension and sovereign wealth funds, are investing alongside GLP to develop modern logistics facilities in China,” says GLP in a filing.

GLP China is the manager and holds a 56% stake in CLF II.

China is GLP’s primary market for development with development starts growing at 30% per annum.

CLF II is more than double the size of CLF I (US$3 billion) given the size of the market opportunity and strong demand from investors.

The offering was significantly oversubscribed and provides long-term capital that enables GLP to strengthen its network effect, better serve customers and de-risk its development pipeline.

Ming Z. Mei, Chief Executive Officer of GLP, says, “Building on the strong performance of CLF I, the successful closing of CLF II reflects the confidence of institutional investors in GLP’s proven track record as an operator, developer and fund manager. China remains our primary market for development. The fund management platform is an important source of capital for GLP and we remain focused on leveraging it to scale our business effectively while driving higher risk-adjusted returns.”

CLF II expects to start acquiring land later this year and commence construction of new developments in April 2016.

CLF II carries a similar investment mandate as CLF I, GLP’s first China development fund which was launched in November 2013 and has reached its investment capacity.

Both CLF I and CLF II seek to capture the significant opportunities arising from the shortage of modern logistics infrastructure in China.

GLP says demand for modern warehouse facilities is driven by growing domestic consumption, urbanisation and the growth in e-commerce.

Its portfolio has grown at a 61% compound annual growth rate over the last decade, and today encompasses 127 million sf of completed facilities.

With CLF II, GLP’s fund management platform expands 36% to US$27.1 billion.

GLP closed 5 cents higher at $2.55 yesterday.