May 07, 2020 03:58 AM

JPMorgan Strikes Logistics Deal in China as E-Commerce Takes Off

(Bloomberg) — JPMorgan Asset Management’s alternative investment arm formed a joint venture with New Ease China to capitalize on the nation’s booming logistics sector as online shopping skyrockets.

JPMorgan Global Alternatives will partner with Shanghai-based logistics real estate investor New Ease to invest in properties across China, according to a statement Wednesday. The initial portfolio consists of logistics facilities worth around $600 million in cities including Shanghai, Nanjing and Suzhou.

While the coronavirus outbreak has largely come under control in China, lingering fear of infection has kept many people at home, even though they are free to move about and return to workplaces. It could mark a permanent shift in consumer behavior, making e-commerce in the world’s second-largest economy even bigger than before.

“Tenant demand for quality logistics facilities remains robust and perhaps has even strengthened as consumers increasingly shift to e-commerce,” New Ease founder and Chairman Sun Dongping said.

Logistics properties became one of the most resilient real estate asset classes during the outbreak. In Shanghai, the cost to rent such facilities climbed 0.9% in the first three months of the year from the quarter prior, while offices and retail malls both experienced a decline in leasing costs, CBRE Global Inc. data show.

High-quality logistics properties in China are still in short supply, said David Chen, JPMorgan Global Alternatives’ chief investment officer for real estate in Asia Pacific. “We’re excited to form this long-term industrial partnership with New Ease.”

JPMorgan Global Alternatives manages around $145 billion of assets globally including real estate, private equity, credit, infrastructure, transportation and hedge funds.

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