Sime Darby Property, Malaysia’s largest property group, has formed a 51-49 joint venture with Logos to develop logistics facilities in Malaysia.
The partnership has created Industrial Joint Venture to act as an investment holding company and manager of logistics funds.
Its first fund was announced today, with a target of RM850m (€174m) in total commitments to be raised from third-party capital partners.
At a media briefing, Sime Darby Property group managing director, Azmir Merican, said his firm had allocated a 177-acre site – within its prime Bandar Bukit Raja township in Klang, in Selangor – to the joint venture for its seed project.
Merican said Sime Darby had a total industrial land bank of 2,800 acres.
“This gives you the potential of what is available for further development after we finish the first project,” he said.
What he termed “this strategic partnership” was a significant step forward in the company’s evolution into a real estate development company, which would have a wider recurring income base including from funds management by 2025, he said.
Trent Iliffe, joint managing director of Logos Group, said Logos had initiated discussion with Sime Darby “four or five years ago” because Malaysia was an important link for logistics customers in the region. “It has been a long journey for us.”
He said: “The size and scale of what (our) customers need and the liquidity that it will generate will help re-establish Malaysia as a global investment market. We do believe the joint venture would be a bit of a gamechanger,” he said.
“It might take us two to three years to achieve that scale, but we will definitely see more foreign direct investment interest coming into Malaysia.”
The industrial joint venture is Sime Darby’s second with an offshore partner. In 2018, it formed a 50-50 joint venture with Japan’s Mitsui to develop a 35-acre site in Bandar Bukit Raja.
Merican told IPE Real Assets that this joint venture was ongoing, but its focus was on developing small-scale projects on small lots.
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