GLOBAL - A joint venture between between two Asian sovereign wealth funds has acquired 15 prime logistics assets in Tokyo and Osaka for JPY122.6bn (€1.2bn) from LaSalle Investment Management.
Global Logistic Properties (GLP), a listed subsidiary jointly-owned by the Government of Singapore Investment Corporation (GIC) and the $406.9bn (€308.2bn) China Investment Corporation will each initially contribute $272.9m. A consortium of Japanese banks will provide the balance via a five-year JPY81bn credit facility.
In a presentation to investors, GLP said it expected first-year returns of 12% before fees. GLP, which will manage the portfolio from the first quarter of next year, did not disclose the management fee.
Describing the joint venture as a strategic move to build out the firm's fund management platform, GLP chief executive Ming Z Mei pointed to a lack of supply of modern warehousing against demand boosted by retailers reconfiguring their supply chains.
More than 90% of the portfolio is concentrated in Tokyo and Osaka, with an occupancy rate of more than 98% and an average unexpired lease length of 5.6 years.
The majority of tenants in the newly acquired assets are e-commerce firms, which currently account for around 11% of GLP's assets. The fund manager's portfolio is currently dominated by retail at 43%, compared with 20% for technology and 11% for fast food.
The deal will boost GLP's lead as a logistics owner in Japan from 2.8m square metres to 3.6m, compared with Prologis's 2.6m.
This will be GLP's second joint-venture investment in the Japanese logistics market.
In September it announced a three-year partnership to invest $250m in Japanese warehouses with the CA$152.3bn (€113bn) Canada Pension Plan Investment Board (CPPIB).
In separate news, the €1.6bn Goodman European Logistics Fund (GELF) has secured a €400m four-year credit facility from the consortium of three banks and the same amount in bilateral bank agreements. The fund manager is expected to use the additional funding to bring the vehicle's assets under management up to €2bn.