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Carlyle, Townsend partner with Shanghai Yupei to invest in Chinese logistics warehouses

29 Aug 2013

Nasdaq-listed Carlyle Group and real estate investor Townsend Group have confirmed a strategic partnership with logistics warehouse developers Shanghai Yupei Group to invest in 17 warehouses in China.

Carlyle and Townsend will commit approximately $200m to acquire equity interests in five warehouses owned by Shanghai Yupei Group and to build 12 new warehouses in the next two years. Shanghai Yupei Group will also invest $200m, bringing the total commitment of the strategic partnership to $400m.

The 17 warehouses will be located in logistics hubs across China, including the first-tier cities of Shanghai, Beijing, and Guangzhou, and select second-tier cities such as Shenyang, Tianjin, Chongqing, Zhengzhou and Hefei. Upon completion of its investment plan, the strategic platform expects to own and operate a nationwide logistics warehouse network with more than 1.8 million square meters of gross floor area to serve a diverse range of tenants.

Jason Lee, managing director and head of Carlyle Asia Real Estate, said, “Modern logistics is a nascent but fast growing industry in China, supported by strong growth in domestic consumption, exponential expansion of e-commerce and favorable government policies.”

“We are attracted to the logistics warehouse sector in China by its favorable demand and supply fundamentals, and we are excited to work with Shanghai Yupei Group, one of the most experienced and highly regarded domestic logistics warehouse developers in China, to build a nationwide network of high quality warehouses.”

Nicholas Wong, principal of The Townsend Group added, “Townsend views the growth of modern logistics to be a compelling secular investment theme in China, and around the globe. We are pleased to partner with The Carlyle Group and Shanghai Yupei Group, an experienced logistics developer and operator, to bring this unique investment opportunity to our clients.”

Carlyle’s share of the equity will come from Carlyle Asia Real Estate (CARE), which invests in opportunities across all real estate sectors in Asia, as well as in core assets on behalf of separate accounts. With local teams based in Hong Kong, Shanghai, Singapore and Tokyo, CARE has committed an aggregate $2.2bn of equity in Asia. In China, CARE has made 15 investments with an expected total capitalisation of $3.1bn.

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