China and the logistics companies that serve it are taking steps to build up their infrastructure.
GLP, one the world’s largest providers of modern logistics facilities based in Singapore, is set to be the first company to issue onshore “Belt and Road” bonds. GLP China has received approval from the China Securities Regulatory Commission to issue up to $1.8 billion of Belt and Road bonds on the Shenzhen Stock Exchange. Proceeds will be used to repay existing debt related to the financing of GLP’s recent acquisition of logistics assets in Europe.
Last month, GLP completed the acquisition of Gazeley, a developer, owner and operator of logistics facilities in Europe, for $2.8 billion. GLP said the transaction positions the company to have one of the highest quality portfolios in Europe, as well as an experienced local management team with a strong development track record. GLP intends to inject the Gazeley portfolio into its fund management platform.
B&R bonds are bonds used to finance projects related to the One Belt One Road initiative, or Belt & Road, that seeks to connect Asia and Europe over land and sea. GLP China has an AAA3 credit rating, the highest possible rating in China, and plans to issue the B&R bonds in multiple tranches, depending on GLP’s financing needs and market conditions.
China’s Belt & Road One Road policy is aimed at shifting the power balance geopolitically and economically in the world away from the West and to China. It consists of more than 65 countries and 40 percent of the world’s gross domestic product, connecting countries across Asia, Europe and Africa with physical and digital infrastructure.
In May, Chinese President Xi Jinping pledged $124 billion for the plan. But some have questioned China’s ability to finance the initiative, so that bond issuance would seem to be a significant development.
More than $900 billion in projects are planned or underway, Fitch Ratings noted in a report titled, “China’s One Belt and One Road Initiative Brings Risks.” It says most funding will likely come from China’s policy banks, the Export and Import Bank of China, China Development Bank and its largest commercial banks.
“We estimate that outstanding loans from Chinese banks total $1.2 trillion, and a large portion of that has financed infrastructure projects involving Chinese state-owned enterprises,” the report said.
[Read more about China: Sourcing 2050: As China Goes, the World Follows]
GLP is one of the world’s largest real estate fund managers, with more than $43 billion of assets under management and a global portfolio of 636 million square feet spread across eight countries globally.
GLP China is the largest owner and operator of modern logistics facilities in China, with a 319 million-square-foot portfolio across 38 strategic submarkets. GLP’s customers in China include some of the world’s most dynamic manufacturers, retailers and third party logistics companies, including Best Inc., BMW, JD.com and LF Logistics.
Meanwhile, FedEx has opened its new FedEx Shanghai International Express and Cargo Hub located at Shanghai Pudong International Airport. The facility provides greater connectivity and convenience to the FedEx global network and overseas markets for customers in eastern China, particularly those shipping to the U.S. and Europe.
The Shanghai Hub is the largest of its kind at Shanghai Pudong International Airport. The new facility applies cutting-edge technologies and innovation to enhance operational efficiency. The 134,000 square-meter facility is equipped with a dedicated Customer Care Center, as well as cold chain facilities.
“The Asia Pacific region remains the growth driver of the world,” said David L. Cunningham Jr., president and chief executive officer of FedEx. “This new hub adds yet another major facility to our already comprehensive regional and global network, giving our Asia Pacific customers reliable access to international markets.”
FedEx currently has 66 weekly flights in and out of the hub. With a fully automated sorting system, the new facility can process up to 36,000 packages and documents an hour. The facility utilizes information technology to send real-time information, including flight and shipment status to customers’ mobile devices so they can arrange pick-ups accordingly and reduce logistics cost. With dedicated areas for China Customs and China Entry-Exit Inspection and Quarantine, the hub simplifies operations and improves the Customs clearance process.
“The FedEx Shanghai Hub marks another milestone that helps support the economic growth of east China,” said Karen M. Reddington, president of Asia Pacific for FedEx. “By continuously enhancing our services and facilities, we can provide our customers an edge in the fast moving and ever-changing business environment,”
The FedEx Shanghai International Express and Cargo Hub reinforces the city’s position as one of the world’s leading international shipping centers, which has ranked among the top three in the world for 10 consecutive years with a cargo and mail throughput of 3.84 million tons in 2017.