The Redwood Group is investing $1bn (€914m) in two Japanese logistics schemes.
The Singapore-based logistics fund manager Redwood, the Asia logistics partner of Equity International, said it has started two prime developments in greater Osaka with a combined estimated completion value of more than ¥120bn (€914m).
PGGM last year committed $100m to Redwood’s Japan Logistics Real Estate venture.
The Dutch pension fund asset manager has committed more than $230m to the strategy.
The two new distribution centres, Redwood Nanko DC and Higashi Osaka DC, are in the bay area of Nanko Naka and inland at Fujiidera, respectively.
The planned Redwood Nanko DC, which will offer around 250,000sqm of space, is due for phased completion in 2016 and 2018.
Construction of Redwood Higashi Osaka DC, at 150,000sqm, is due to start in October.
Diamond Realty Management (a subsidiary of Mitsubishi Corporation), Sumitomo Mitsui Trust Bank and Shinsei Bank are financing the schemes.
Japan managing director Hideaki Matsunami said that, with underlining strong demand in the Osaka region, the vacancy rate for industrial and logistics properties in the Greater Osaka region was at “an all-time low” of 0.4%, compared with Greater Tokyo’s 3.8%.
The market’s fundamentals, Matsunami said, were “making it difficult for firms to find enough quality space to meet their needs”.
Redwood said it also started construction of its Chibakita DC scheme in Greater Tokyo.