GLOBAL - CBRE Global Multi Manager has bought into an existing Japanese joint venture owned by sovereign wealth funds, which could signal the start of a multi-billion-euro reshuffling of global logistics ownership.
The multi-manager arm of CBRE Global Investors has acquired a 16.7% stake in GLP Japan Logistics Partners, a 50-50 joint venture between China's CIC and Global Logistics Properties, which was listed on the Singapore stock exchange by Singapore's GIC in 2010.
The interest was acquired for JPY7.6bn (€74m) on behalf CBRE Global Multi Manager separate account clients, including one of its sponsored funds.
As a result, Global Logistics Properties will hold a 33.3% interest, while CIC retains 50%.
The joint venture owns 15 logistics properties, located predominantly in the greater Tokyo and Osaka areas.
The deal was announced a day after IPD launched its first pan-European logistics performance report - showing the sector returned 6.4% in 2011 - in anticipation of greater institutional investment in the sector.
Delegates at the launch event in London were told to expect logistics assets worth several billions of euro to change hands over the next 6-12 months, albeit not necessarily through direct trades.
James Markby, director in the capital markets team at CBRE, told the audience his firm was aware of some €17bn of logistics assets in the market today, 90% of which would undergo changes in terms of ownership and capital structure.
Afterwards, Markby told IP Real Estate: "There are fundamental changes going on in the overall capital structure that is going to reshape the European logistics over the next 12 months.
"I am pretty confident that indirectly and within the capital structures - without the overt trading of assets - there will be some significant changes and reshuffling of the ownership."
Richard Kolb, director for real estate investments at Canada Pension Plan Investment Board (CPPIB), said it would help investors better understand the sector.
His presentation showed how the Canadian pension fund had 12.75% of its global real estate exposure in industrial (most of which was logistics), the majority of which was located in Asia.
Markby cited recent research by CBRE and pension consultants Mercer that applied statistical and actuarial techniques to assess the attractiveness of logistics to institutional investors.
It assessed logistics not only in relation to other property sectors but other asset classes, such as equities and bonds.
Markby said he expected more pension funds and sovereign wealth funds to increase their allocations to logistics either "as a more core holding" or "as an attractive diversification" play alongside their existing property holdings.
He also implied there would be potential for logistics real estate investment trusts to emerge.
"There is the potential appetite for that in the current market," Markby said. "It remains to be seen whether that can be proved or not, but it probably will be shortly."
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