Blackstone Inc. is in advanced negotiations to sell three of its logistics projects in China’s Greater Bay Area to Ping An Insurance (Group) Co. for approximately 2.7 billion yuan ($372 million), according to sources familiar with the matter. The deal marks a significant exit from Blackstone’s China logistics business as domestic investor demand rises.
The properties for sale include a 49-acre logistics park in Foshan city and two other sites in Dongguan. Following the sale, Blackstone will continue to manage the projects, with the transaction expected to conclude by the second quarter of 2025.
This potential sale underscores Blackstone’s shifting strategy after expanding heavily into China’s logistics market until 2022. The firm, like many foreign investors, has scaled back its investments amid the country’s economic downturn, which has been exacerbated by a property market slump. Other foreign investors have followed suit, with Canada Pension Plan Investment Board recently selling its stake in four real estate ventures to Dajia Insurance Group for $164 million.
Once a thriving segment of China’s commercial real estate sector, logistics parks have struggled since late 2023. These facilities were built to meet the growing demand from e-commerce, manufacturing, and food storage, but many are now facing rising vacancies. As a result, landlords have been forced to reduce rents and shorten lease terms.
However, the Greater Bay Area, where Blackstone’s assets are located, continues to experience the lowest vacancy rates in the country, according to research from Warehouse In Cloud. The region has benefited from a surge in cross-border e-commerce, helping to sustain demand.
The ongoing talks also highlight the growing interest of long-term investors, including Chinese insurers, who are seeking higher returns amid a deflationary economic environment. With China’s 30-year government bond yield hovering around 2%, the logistics parks being sold offer more attractive yields, making them appealing to investors seeking better returns.
The projects for sale are part of DragonCor, a portfolio company established by Blackstone’s real estate funds around 2018.
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