Sector Growth + Private Risk Capital + Infrastructure Development + Logistics Assets + Economic Development = Higher Returns and Growth
Blending and joining-up these players, funds and economic activity in a strategic manner can yield huge benefits. The Chinese have done this well before, sometimes but not always with the help of huge public investments. The substance of this story is around an infrastructure/property investment group’s acquisition of a port asset in China. We think this is probably a smart move, in that market it will create strong market and investment synergies. In North America and Europe, we should be joining things up better.
The point is that connecting dots can create much higher public and private returns than would occur by an uncoordinated and disjointed strategy. GLDPartners project focus is on the investment multiplier effect of the power of clustering infrastructure and logistics-dependent distribution and manufacturing investment. We see tangible evidence of how investment districts around seaports and airports, and strategic inland ports can create huge upside value. The key is getting the players on the same page, in particular we see the public sector lagging in their strategic use of land-use strategy, infrastructure planning and investment and the public ownership of key logistics assets such as airports and seaports. Those that lead will stand out and succeed.
From an article in American Shipper:
International infrastructure company Yangtze River Development Ltd. (YRDL), which engages in industrial and logistics real estate development in China’s Yangtze River, has an agreement in place to purchase Wuhan Economic Development Port Co. (WEDPC), YRDL confirmed in a filing with the U.S. Securities and Exchange Commission.
WEDPC is a large infrastructure development project positioned in the Chinese city of Wuhan, a trading window between China, the Middle East and Europe. The logistics center is also expected to provide multiple shipping berths for cargo ships of various sizes, as well as provide domestic and foreign businesses a direct access to the Free Trade Zone in Wuhan.
The project is planned to include commercial buildings, professional logistic supply chain centers, direct access to the Yangtze River, Wuhan-Xinjiang-Europe Railway and ground transportation, storage and processing centers and IT supporting services, among other features.
YRDL said it plans to release more details about the planned transaction on Jan. 2, but among the information currently known about the transaction is that YRDL is buying the property in exchange for 600 million Chinese yuan (U.S. $92 million) and current real estate assets that it owns. It has already deposited 30 million yuan (U.S. $46 million) and says it intends to complete the transaction by the end of first quarter of 2018.
Wuhan Economic Development covers about 7 kilometers (4.3 miles) of shoreline, as compared to YRDL’s current shoreline of about 1 kilometer (0.6 miles).
Yangtze River Development has said that the acquisition is still subject to the completion of the audit of Wuhan Economic Development and approval by the relevant regulatory agencies.
