Reuters reports that China Logistics Property Holdings (CNLP) and JD.com are planning to set up funds to co-invest in warehousing projects to double its domestic market share.
CNLP is expected to contribute 30 percent of the amount needed by partnering with LaSalle Investment Management Asia. The fund will invest up to $300 million over five years into China warehouses. The company is also looking to set up at least four more funds in the next three years.
The expansion plans comes as China's logistics industry is experiencing an increase in demand for warehousing and delivery from companies like Alibaba and JD.com, Reuters reports. The country is under supplied in warehouses, only equaling out to a quarter of U.S. levels.
CNLP's fund with LaSalle will be able to develop a warehousing floor area of up to 600,000 square meters. After five years, LaSalle can opt to exit, acquire or sell its stake in the projects.
Once China sees an expansion in warehouses, CNLP aims to add its services to countries like Vietnam, Cambodia, Indonesia and Malaysia in the future.
While JD.com is a major player in the Chinese economy, the online retailer is committed to using CNLP's warehouses. Reuters reports that in April the company bought nearly 10 percent stake in the logistics firm.