PGGM invests in Chinese logistics development fund
GLOBAL - PGGM has committed €95m to a Chinese logistics development fund managed by emerging markets specialist Redwood Group Asia.
The PGGM Private Real Estate Fund committed the capital as part of a strategy to diversify across property types in the Chinese market.
Guido Verhoef, head of private real estate, and Thijs Schoenaker, senior investment manager, said PGGM's 'develop and hold' strategy would give it a portfolio of income-generating assets.
Meanwhile, the €125bn pension fund manager forecasts Chinese logistics will benefit from strong economic and consumption growth, as well as urbanisation.
The fund, which achieved a first close of RMB2.5bn (€310m), will target distribution, logistics and light manufacturing assets - including car manufacturing - in "selected high-growth markets".
"Investments will be driven primarily by customer demand," said PGGM in a statement, citing JLL forecasts that China's undersupplied industrial real estate market would grow by up to nine times within 10 years.
In a joint statement, Redwood president Charles de Portes and chief executive Stuart Gibson pointed to "an undersupply of efficient, high-quality distribution facilities [needed] to keep pace with the tremendous and growing demand".
They added: "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."