CHICAGO / SHANGHAI / LONDON / MILAN (May 20 2008) – LaSalle Investment Management (“LaSalle”) today announced a joint venture agreement with Realty Vailog S.p.A. (“Vailog”) to acquire and develop logistics facilities in the Greater Shanghai Region on behalf of its LaSalle Asia Opportunity Fund III. The agreement is seeded with a portfolio of four properties, purchased from various sellers for approximately RMB 792 million (USD $112 million), consisting of one build-to-suit development and three speculative developments all located within key logistics corridors of Shanghai, China. At completion of this deal, the LaSalle / Vailog portfolio is one of the largest international grade logistics portfolios in Shanghai, with gross floor area (GFA) of more than 320,000 square meters.
The only build-to-suit development in the portfolio is located in the Songjiang District of Shanghai and is a direct land acquisition from the government. A confirmed tenant has leased the entirety of the project and will occupy the property in three phases. The property comprises an 18.8 hectare site (approximately 47 acres) and an existing logistics facility with an 111,781 square meter built-to-suit development, 105,739 square meters of warehouse space and 6,042 square meters in ancillary office space.
The first of the three speculative developments is land that has been cleared and readied for development in the Jiading District. The site comprises 6.7 vacant hectares (approximately 17 acres) and the plans include the construction of a 33,524 square meter facility, including a 32,414 square meter warehouse and a 1,110 square meter ancillary office space. The other two speculative projects are located in the districts of Minhang and Lingang.
Trent Iliffe, Regional Director, LaSalle Investment Management, states: “LaSalle has a successful history of partnering with Vailog through our pan-European open ended fund Encore+, and we’re confident in our continued abilities to realize synergies to establish a long term partnership focused on logistics in China. Vailog is a reputable and experienced international logistics developer and, coupled with LaSalle’s extensive logistics investment and development expertise, this new joint venture will enable us to continue to provide tailored and innovative investment solutions for our clients.”
Giuseppe Garofano, Chairman, Realty Vailog S.p.a., adds: “Over the past two years, Vailog has taken strategic land positions in the key logistics areas of Shanghai, building a team of experienced Chinese real estate professionals. The partnership will allow Vailog to expand the offer of new logistics spaces in China on a much larger scale and join forces with LaSalle to serve the needs of our respective customers.”
This venture comes at a time when the China logistics market is booming. In 2006, figures show the sector in China had experienced a 17.0 percent year-over-year growth, reaching approximately USD $8.3 trillion, an increase of nearly 600 percent since 1995. Such rapid expansion in the sector is attributed largely to increasing retail activities, increasing manufacturing outputs, and a rise in both imports and exports. The outlook for the logistics market remains strong due in part to high demand from international companies. Additionally, limited land supply continues to hamper further development in logistics facilities, which will contribute to rental growth in line with forecasted market rent growth of 10-15 percent per annum over the next three years.
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About LaSalle Investment Management
LaSalle Investment Management, Inc., a member of the Jones Lang LaSalle group (NYSE: JLL), is a leading global real estate investment manager, with $50.4 billion of assets under management. LaSalle Investment Management is active across a range of real estate capital and operating markets including private and public, debt and equity. LaSalle Investment Management is authorised and regulated for investment business in the UK by the Financial Services Authority. For more information, visit www.lasalle.com.
About Realty Vailog
Realty Vailog S.p.A. is Italy’s leading real estate development company specialized in logistics. Realty Vailog is listed on the Milan Stock Exchange (Mercato Expandi: RLT.MI) and has developed and leased over 1,000,000 m2 over the past four years. For more information, visit www.realtyvailog.com.