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Investment giant Blackstone has made it to “advanced talks” on selling three logistics hubs in China’s Greater Bay Area to Ping An Insurance, according to Bloomberg.
Bloomberg’s sources reportedly said Ping An’s life insurance arm will pay approximately 2.7 billion Chinese yuan ($372 million) for the three properties—a 49-acre park in Foshan city, about an hour outside of Guangzhou, and two sites in Dongguan that amount to about 271 acres.
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The company has repeatedly echoed that, “Logistics is one of Blackstone’s highest-conviction investment themes.” Last year, Blackstone purchased 80 percent of a European logistics project worth more than $1.2 billion. It also snapped up 18 last-mile logistics assets—boasting 2 million square feet of space—in the United Kingdom for £200 million (more than $252 million) to put into its Indurent UK business.
When it takes on such transactions, executives have cited “increased occupier demand and strong e-commerce growth” as important factors in the portfolio expansion globally.
Still, despite its fixation on logistics, this isn’t the first time Blackstone has sold off some of its investments in the industry; in April 2023, the company sold six logistics assets throughout Japan to Singaporean sovereign wealth fund GIC for over $800 million.
Logistics can prove a challenging market, where many existing players have struggled to survive. That may be of particular significance in China, where Blackstone is, per Bloomberg, planning a partial exit.
According to data from CBRE, at-large logistics vacancy rates increased year over year from 2022 to 2023 by 3.6 percent, while rents on warehouses decreased by 2.8 percent, on average. And data from Cushman & Wakefield showed that, as of Q2 2024, that vacancy rate had continued to rise; at the time, it had hit a then-record of 17.2 percent, showing potential signs of trouble for the market.
The CBRE data further showed that, in Foshan, where one of the three logistics parks up for sale is located, the vacancy rate increased from 2022 to 2023. Still, its vacancy rates remained lower than many other areas. The firm’s data showed that vacancy rates were nearly zero in Dongguan, where the other centers are headquartered.
The three facilities in question are located near the Shizi Channel, which flows into the South China Sea. But the cities of Macau and Hong Kong, located along the southern coast of China, have unfettered access to the sea and are located in direct proximity to the Port of Hong Kong, the Port of Shenzhen. Those cities have also seen business boom because of e-commerce transactions.