Industrial capital in the field of logistics: the case of Prologis

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Analyst | Raphael Ge

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This "prelude" is not another "prelude"

Nowadays, when it comes to logistics real estate developers and logistics industry investment, it is impossible not to mention ProLogis, but many readers may not know that the ProLogis we are talking about today is actually not the originator of logistics real estate, the initiator of the concept of logistics real estate, and the first logistics real estate operator in the world-American ProLogis Group, but the continuation of its Asian business and team-Global Logistics Real Estate (GLP), which was spun off earlier. Today, it is the first logistics real estate operator in the world.

In the 1980s, Progolis (formerly Prologis, now Ambow Company) in the United States put forward the concept of logistics real estate (logistics real estate refers to the logistics activities in which logistics real estate developers choose suitable locations according to customers' needs, build specialized logistics facilities and sublet them to customers to provide related property management services) and took the lead in practice. Now Progolis in the United States has become the largest logistics real estate developer in the world. According to Progolis official website, by the end of 2020, Progolis' business in the United States has covered 19 countries on four continents, with total assets under management of 145 billion US dollars and total annual cargo turnover of 2.2 trillion US dollars, equivalent to 3.5% of the total GDP of 19 countries.

Singapore Prologis Group (GLP), formerly known as the Asian business of American Prologis Group, was acquired by Singapore Government Investment Corporation (GIC) for US$ 65.438+300 million in 2008 and listed on Singapore Stock Exchange in 2065.438+00 and 654.38+00.

Seven years later, on July 4th, 20 17,10/600 million USD was successfully acquired by China consortium. Consortium: Hopu Investment holds 2 1.3%, Vanke Group holds 2 1.4% and Gaoyou Capital holds 2,650. 2065438+2008122 October, 65438+2008, Prologis officially announced its delisting from the Singapore Stock Exchange, and the privatization process was officially completed.

From 2003, American Prologis entered the China market, and now GLP Prologis is the core position in the domestic logistics field. The development of logistics real estate and logistics industry in China can not be separated from the output and practice of companies and teams with rich international experience, and of course, it also benefited from the foresight of China consortium to privatize Pross a few years ago. IIR This case will mainly focus on today's Hengtong GLP Group for case analysis, focusing on the investment in the logistics field.

From Forced Prostitution to Dominating Wulin: Dominating History of Prosperous GLP Logistics Real Estate

The privatization of 20 18 1 Prologis is completed, which represents the first time that China logistics giants have entered the world stage.

In 2009, Prologis sold all China assets and part of Japanese real estate funds to form GLP. In 20 17, China consortium bought Prologis for10/600 million. In 20 19, Prologis' US logistics assets were sold to Blackstone Group for1870 million.

The global network and scale of logistics real estate;

By the end of 2020, Prosper GLP's global business covers 65,438+07 countries on four continents, with asset management scale exceeding 65,438+00 billion USD and 63 real estate and private equity funds.

In 2020, the total area of newly signed and renewed leases of GLP Fortune reached 22.7 million square meters, up 57% year-on-year. In the same period, the total area of newly started projects reached 5.6 million square meters, involving a total investment of 5.3 billion US dollars, up 75% year-on-year.

Prologis GLP logistics real estate operation mode;

Different from the asset-oriented mode of cross-border and domestic logistics real estate developers such as JD.COM, Wan Wei and Yu Pei, GLP Shengshi realizes asset-oriented and high turnover operation through the logistics real estate fund mode, effectively solving the problem of capital occupation in the process of holding property for a long time and accelerating its own expansion.

Prosperity of GLP in China (logistics real estate);

Prologis China is the platform for Prologis Group to carry out modern warehousing development, operation and logistics-related business in China. At the same time, its business also covers private real estate funds, asset securitization, strategic cooperation and investment.

With the development of economy and the improvement of residents' consumption level, the demand for logistics in China is increasing. E-commerce promotes the rapid rise of express delivery and warehousing demand, and logistics developers are also accelerating their expansion. By the end of 20 18, the area of general commercial warehouses in China was 106 billion square meters, and the number of logistics parks reached 1638 (according to the data of China Industrial Information Network).

Prosper GLP has developed rapidly in China through mergers and acquisitions, and has become the largest provider and service provider of modern logistics and industrial infrastructure in China, with an absolute leading position in the field of modern warehousing.

According to the Prospectus 20021issued by Prologis China 20021year1October 20th, as of September 30th, 2020, Prologis China has a logistics storage area of about 40.42 million square meters in China, with a construction storage area of about 29.89 million square meters, ranking first in China's modern storage industry. Prologis China warehousing and logistics park has covered 43 major cities and logistics hub markets in China, with 397 warehousing and logistics parks, with a total construction area of about 4.288 billion square meters and assets in China exceeding 30 billion US dollars.

From June 5438 to September 2020, Prologis China achieved a total operating income of 923 million US dollars. Storage lease and fund management income (mainly storage lease income, income from providing relevant financial services to storage customers and management fees, etc.). ) accounted for 94.02% of the total operating income, of which storage rent and related income accounted for 73.69% of the total operating income.

Main customers of Prologis China (Logistics Real Estate):

The customers of Prologis China are mostly large and medium-sized customers, and the main customer industries are mostly the third-party logistics industry, e-commerce retail industry, manufacturing industry and pharmaceutical industry.

Prosglp fund map

Logistics real estate fund:

In addition to modern warehousing development, operation and logistics related business, Prologis China also has rich investment management experience. At home and abroad, it has raised and operated a number of logistics real estate funds that invest exclusively in China. The asset management scale of these funds has exceeded RMB 654.38+03 billion, and the team is mainly composed of experienced logistics professionals and ProLogis elders.

Equity investment (fund investment+direct investment):

In addition to investing in logistics real estate in China, Prologis China has also made a large number of equity investments. As a fund investment of LP, Prologis contributed 200 million yuan to support the mixed ownership reform fund of state-owned enterprises in China (65438+February 2020) and 50 million yuan to become Gaocheng Capital LP founded by former Gaocheng Capital Hongjing.

In recent years, with the layout of Prologis GLP in the logistics ecosystem, the investment target of Prologis China has gradually expanded from logistics transportation as its main business in the early days to improving the related fields of logistics infrastructure business, such as big data and financial technology, artificial intelligence and other artificial intelligence will focus on autonomous driving and driverless driving, and will cooperate with the logistics system.

Hidden mountain city:

Yinshan Capital, a private equity investment platform owned by ProLogis, was established on 20 18, focusing on investment in the field of logistics ecology. According to the data of China Foundation, Yinshan Capital has two filing funds (of which 1 has been liquidated in advance), and the management scale is nearly 10 billion yuan.

As an investment platform under Prologis, Yinshan Capital focuses on the complementary areas of investment and Prologis logistics infrastructure business, and further contributes to the construction of Prologis logistics ecosystem. By the end of 2020, the investment scale of Yinshan Capital has exceeded 6 billion yuan, and more than 50 companies have been invested, mostly in the logistics and transportation industry (more than 50%), and some projects have taken away the share of Prologis' early investment.

Prologis Jianfa Equity Investment Fund:

In September 2020, Prologis GLP and Xiamen Jianfa Group initiated the establishment of the first parent fund, Prologis Jianfa Equity Investment Fund, which was jointly funded by Prologis, Jianfa Group, Xiamen State-owned Enterprise Strategic Development Fund, Free Trade Zone and Xiang 'an District, and Xiamen Junju Investment Management Co., Ltd. was established to be responsible for operation and management. The target scale of the fund is 750-654.38+0 billion yuan, and the first round of raising 5 billion yuan has been completed. Similarly, continuing Prologis' identity and principles, the team members of the parent fund are all market recruits and professionals with rich investment experience in the parent fund.

By February, 20265438 10, Prologis Jianfa Equity Investment Fund had invested more than 600 million yuan, with 5 investment funds, including Zhongding Capital, Junlian Capital, Chen Yi Investment, Hubei Caive Fund and Sheng Yuan Venture Capital.

From June, 5438 to June, 2020 10, Prologis Jianfa Equity Investment Fund made its first direct investment-Zhenkunxing. Other institutions participating in the investment in the same period include Yunfeng Fund, China State-owned Enterprise Structural Adjustment Fund, Tencent Investment, Jingwei China, Junlian Capital, Tongchuang Ye Wei, Jianfa Emerging Investment, Zhongding Capital, Sheng Yuan Venture Capital, etc. It can be seen that the direct investment part of ProLogis Jianfa's parent fund,

Logistics investment partners: Pross and Zhongding Capital

As we all know, Zhongding Capital is an organization focusing on logistics. As the head of Prosper GLP, Mei Zhiming is also the founding partner of Zhongding Capital and the chairman of the investment committee. Since its establishment, Zhongding Capital has been deeply involved in the field of logistics for a long time, and has had many interactions with Prosper GLP, and there are also many intersections in investment targets.

label

The logistics field (including logistics real estate) is mostly asset-oriented and strongly capital-driven. As a representative of industrial capital with overseas genes and now fully localized, Prologis' logistics real estate development+operation+fund management model has formed a more stable iron triangle for its business.

With the upgrading of domestic consumption and the rapid rise of e-commerce industry, the logistics industry has entered a new competitive period, with both opportunities and challenges. The fund management business not only endows Prologis with financial leverage, new profit sources and faster capital return, but also attracts various intangible resources as one of the logistics infrastructure builders, giving it a strong "circle of friends", such as large-scale Internet platforms, insurance funds, real estate developers and so on.

Under the mode of internal+external capital linkage in the investment sector, LP and direct investment attack in parallel, and with deep partners, Prologis has undoubtedly become a model to seize the opportunity in China, build China's logistics infrastructure and deeply empower the industry.