36Kr’s In-depth Interview with DragonCor CEO Peter Hwang
Our CEO Peter Hwang was recently featured on China’s leading media platform 36Kr. This in-depth interview covered a wide range of topics from our business model, expansion focuses, ambitious sustainability targets, etc.
36Kr：According to market data, the top five companies by market share in China logistics are: GLP, VX Logistics, Blogis, Yupei, and Mapletree. What’s DragonCor’s market share? What are your expansion plans? What criteria do you look for when looking at investment opportunities?
Peter Hwang：Given the fast growing and dynamic nature of the Chinese logistics industry, it is quite difficult to be precise on market shares of players. Nonetheless, at DragonCor, we do believe that we’ve built one of the largest and most sophisticated logistics portfolios in the country, spanning more than 40 logistics parks across 19 cities, including the largest single logistics park in the Greater Bay Area. The DragonCor platform is backed by Blackstone – the largest owner of commercial real estate in the world – and benefits from the firm’s scale and global network of resources and knowledge.
Our goal is to continue to build the team and platform capabilities, looking for undermanaged assets and development opportunities in China’s tier-1 cities. We are committed to building high-quality warehouses that cater to tenants in fast-growing sectors such as third-party logistics, e-commerce, life sciences, and cold chain.
36Kr：Can you share more about the recent acquisition?
Peter Hwang: We recently added 280,000 square meters of high-quality modern warehouses in the Greater Bay Area to our DragonCor portfolio. These assets are in a prime location, near important infrastructure such as the Guangzhou Airport and a major highway. Our tenants are leading Chinese corporations in fast-growing sectors such as e-commerce and cold storage. They chose to partner with us because of our ability to provide a wide range of capabilities and sophisticated warehouses in strategic locations, which can accommodate the distinct specifications and high level of attention that sectors such as cold storage require.
36Kr：DragonCor recently made key hires including a Head of ESG. How does DragonCor view ESG?
Peter Hwang: ESG is a priority at DragonCor, embedded in everything we do. We address E/S/G at corporate level and extend the positive impacts to our assets, our partners and the communities where we operate. At asset level, ESG principles guide all our projects from the very beginning – we ensure high standards on sustainability to guide our site selection, design process, material selection, construction and operation. We have 10 assets in our portfolio that are certified as LEED Platinum or Gold, and our goal is to make 100% of our buildings green certified within the next three years. We set ambitious sustainability targets for all new acquisitions. We’ve also partnered with different organizations and institutions to drive decarbonization initiatives such as joining the United Nations Global Compact (UNGC) membership and partnering with JLL to publish an ESG white paper. We will soon release our first ESG roadmap that reveals our ESG ambitions and guides our future ESG actions.
36Kr: DragonCor’s portfolio also includes commercial assets such as office. What kind of assets will DragonCor focus on?
Peter Hwang：While DragonCor’s portfolio has become more diversified, logistics makes up the largest portion and will continue to be our main focus. We continue to see strong fundamentals driving demand in the sector including China’s burgeoning e-commerce market (largest in the world today) and a growing middle-class population that’s increasingly going online. DragonCor is well-positioned to benefit from these tailwinds, having built a robust platform in the space and trust with our tenants. In addition, having Blackstone’s support is a major advantage – Blackstone was one of the earlier investors in logistics, having started investing in the sector more than 12 years ago. Today, the firm has built large-scale platforms across Asia, the United States, and Europe.
36Kr: DragonCor has not disclosed specific business in the long-term rental housing sector. Have you stepped into this sector?
Peter Hwang: The DragonCor portfolio includes Aroma Garden, a rental apartment complex, a business park, and a life science park, all of which are in Shanghai. While we continue to be opportunistic in the housing sector, our portfolio remains concentrated in logistics.
36Kr：What are the advantages for logistics property developers to enter the long-term rental housing and commercial property sectors respectively?
Peter Hwang：One advantage for us at DragonCor in having a major logistics presence has been the relationships we’ve been able to build with our tenants – many of our tenants are leading Chinese corporations in fast-growing sectors such as third-party logistics, e-commerce, life sciences, and cold chain. These relationships and the network we’ve built have been extremely valuable as we look for other opportunities to do business in China. Our scale in logistics has also allowed us to build strong back-office capabilities, which are leveraged for other asset classes to improve efficiency and cost.
This is a translated version. The article originates from 36Kr.