ITOCHU Corporation, one of Japan’s four largest trading houses, is poised to launch a logistics real estate investment trust.
It will seek to acquire assets worth more than ¥150bn (€1.35bn).
Industry sources in Tokyo told IPE Real Estate that ITOCHU has already accumulated logistics property worth around ¥150bn, and is looking to launch the investment trust over the next “six to nine months”.
It is unclear at this stage whether the ITOCHU vehicle will be a publicly listed REIT or a private trust.
“I understand that ITOCHU’s current portfolio of logistics assets in the major Japanese cities – including Tokyo, Osaka, and Nagoya – is held on its own balance sheet,” a senior Japanese property executive said.
“But because the portfolio is getting bigger, ITOCHU will seek to bring Japanese and foreign money into the (proposed) trust.”
ITOCHU has its own construction arm, and, over time, will feed assets into the trust to grow the vehicle, sources said.
In February, ITOCHU president and chief executive, Masahiro Okafuji, announced completion of one of the group’s largest logistics centres – I Missions Park Noda, in Chiba. A second project, I Missions Park Sakai, in Osaka, was completed in June.
At the time, Okafuji said ITOCHU was developing two more properties: one in Tsukubamirai City, in the Kanto region, and another in the Adachi Ward, Tokyo, due for completion in 2017 and 2018, respectively.
Accumulation of logistics real estate towards formation of a logistics REIT was on track to reach a total value of ¥150bn.
The projects have emerged following implementation of a strategy outlined two years ago, when ITOCHU announced plans to accelerate development and to increase the asset value of its exposure to logistics real estate in Japan.
The company said in February that it was encouraged by the many enquiries it had received from customers for modern logistics premises, and that it was aiming to “operate these properties at full capacity as soon as possible”.
ITOCHU moved into the logistics sector ahead of its competitors in 2004 when it created private fund specialising in logistics facilities. At the time, it established a joint venture with Mapletree Investments, a large logistics asset manager headquartered in Singapore.
The partnership enabled ITOCHU to use Mapletree’s global marketing network, allowing the two firms to jointly identify customers and to develop an efficient investment scheme.
ITOCHU stepped up its exposure to logistics projects in 2014, when Masahiro Okafuji outlined a strategy to accelerate development of the company’s logistics facilities development business.
Okafuji said at the time that the aim was to contribute to development of a commercial distribution and logistics sector which responded to changes in Japan’s supply chain by building a new business model and increasing asset value.