DNE Group has featured the Jinchuang Building in its portfolio for several years (Image: DNE)
China’s DNE Group on Tuesday announced the establishment of a more than RMB 3.5 billion ($485 million) life science park fund to invest in an R&D project in Shanghai’s Pudong district.
Among the backers for the fund is a local unit of AIA Insurance, according to sources familiar with the transaction who spoke with Mingtiandi, with DNE noting in a release that the vehicle counts several mainland insurance companies as investors.
The fund has invested in DNE’s Shanghai Jinchuang Building, an 88,688 square metre (954,630 square foot) complex in Zhangjiang High Tech Park, which was completed in 2013, sources confirmed to Mingtiandi.
“Due to the scarcity of supply, the growth potential of life sciences industry, as well as the high tenant stickiness, high-spec life sciences parks located in key economic hubs are greatly favoured by insurance companies for their stable occupancy and rental income potential, which translate to favourable investment returns,” said DNE chairman and CEO Sun Dongping.
Downtown Zhangjiang
The fund was launched in the first quarter of 2023 and has already closed with the four-building Jinchuang complex as its sole asset. The property provides R&D facilities to domestic and foreign life science enterprises, DNE said.
DNE Group founder Sun Dongping
The project is located at 4560 Jinke Road in Zhangjiang and is close to the Zhongke Road Station on Metro Line 13 and the middle ring road. The first building in the complex was completed in 2010, with the other three finished in 2013. The property was last renovated in 2016.
DNE manages both the fund and the project, part of over 700,000 square metres of life science parks operated and managed by the Warburg Pincus-backed developer in Shanghai and the Yangtze River Delta region.
With the Jinchuang Building having won over investors, Sun vowed to continue pursuing life science opportunities.
“In the future, we will continue to invest in the life sciences park sector in China and continue to build the high-quality development and operation platform specialised in this area,” he said.
AIA Sees Shanghai Opportunities
DNE didn’t name any of the fund’s investors, but Sun said domestic insurance firms have been deeply engaged in new-economy infrastructure investments in China in recent years. Local news reports had first documented AIA’s involvement during the first quarter of this year.
The insurer, which was founded in Shanghai, paid RMB 5 billion during the fourth quarter of last year to acquire a commercial complex in Shanghai’s Hongkou district from municipal government-controlled investment firm Shanghai Industrial Holdings in one of biggest property investments in the city during the second half of 2022.
DNE manages more than $16 billion in assets and over 14 million square metres of gross floor area across life sciences, logistics and cold chain, manufacturing parks, urban redevelopment, and data centres.
In mid-April the Shanghai-based firm revealed a RMB 14 billion mainland logistics venture with an unnamed global institution, just weeks after announcing the establishment of a RMB 6 billion onshore fund to invest in new-economy infrastructure assets in China’s principal commercial hubs.
Playing Catch-Up
The past five years saw $18 billion in funds raised for Asia Pacific life science real estate, according to CBRE. But a shortage of assets for sale meant that a mere $717 million in direct investment was recorded in 2022, the consultancy said.
Last month, property giant CapitaLand unveiled Geneo, a $1 billion life science and innovation cluster at the 55 hectare (136 acre) Singapore Science Park in the city-state’s Queenstown area with 180,600 square metres of planned gross floor area.
In February, the Singapore-based investment arm of South Korea’s IGIS Asset Management teamed up with a leading Korean biopharmaceutical group to launch a new platform for life science real estate investments across Asia Pacific, reportedly targeting $630 million in fundraising.
Last July, a joint venture of Dutch pension fund manager APG Asset Management and Singapore healthcare-focused private equity firm CBC Group bought an 80 percent stake in a sprawling life science campus in Beijing’s Daxing district for nearly $180 million. The JV deepened its commitment in October by purchasing an industrial site in Shanghai, where it plans to develop manufacturing facilities and R&D office buildings at a total cost of $137 million.
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