Keppel launches China logistics property fund with 1.4b yuan initial commitment

KEPPEL Corporation's asset-management arm has launched a China logistics property fund together with a global institutional investor, with an initial total equity commitment of around 1.4 billion yuan (S$288.8 million).

According to the exchange filing on Tuesday, the fund, which will invest in "developing high-quality logistics assets in key logistics hubs in China", will have an option to upsize by a similar amount by the end of this year.

The fund will be Keppel Capital's inaugural China-focused logistics property fund, with wholly-owned subsidiary Keppel Capital China (SG) serving as the fund's investment manager.

The statement said that the fund will "leverage the experience, network and expertise of the Keppel Group as well as a leading Chinese logistics developer and operator", to undertake the development and the operations of Grade-A logistics facilities across China's key logistics hubs. It include areas such as Greater Beijing, Greater Shanghai and the Greater Bay Area (which includes Hong Kong and Shenzhen).

A pipeline of potential assets has been identified for the collaboration between the fund and the Chinese logistics property developer.

Christina Tan, Keppel Capital's chief executive officer, said: "Despite the challenges brought about by the Covid-19 pandemic, Keppel Capital has continued to work with Keppel's eco-system of companies and other industry partners to create and capture compelling investment opportunities across a range of asset classes."

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She noted that Keppel Capital raised nearly S$4.5 billion last year, including commitments from large global institutional investors, which reflects "strong demand for real assets with cash flow that can serve as long-term inflationary hedges".

Ms Tan added: "Through the fund and our collaboration with our local logistics property partner, we look forward to delivering modern logistics facilities for key cities in the Chinese market, while also generating attractive risk-adjusted returns for our investors."

Keppel Corp said the launch of the fund is not expected to have any material impact on its earnings per share and net tangible asset per share for the current financial year.

Shares of Keppel Corp closed at S$5.10 on Tuesday, up 4.1 per cent or S$0.20, before the announcement.