Global Logistic Properties Ltd. (GLP), the overseas logistics unit of the Government of Singapore Investment Corp., said it formed a joint venture with the Canada Pension Plan Investment Board to invest in warehouses in Japan.
Global Logistic and Canada Pension Plan, which manages C$153.2 billion ($157 billion), will invest $250 million each over three years to develop and hold storage and distribution centers in greater Tokyo and Osaka areas, according to a statement to the Singapore stock exchange. The venture will build up to 12 warehouses that may be worth as much as $1.4 billion, said Jeffrey Schwartz, deputy chairman of Global Logistic.
“Developing logistics facilities in Japan is an attractive use of capital,” said Schwartz. The partnership “will enable GLP to earn solid returns on its capital while managing risk.”
The announcement comes a month after Global Logistic was selected to negotiate with LaSalle Investment Management Inc. in buying about 140 billion yen ($1.8 billion) of warehouses in Japan, two people with direct knowledge of the deal said then.
The vacancy rate for warehouses fell by more than half to 7 percent in June from a peak of 20 percent in September 2009 due to a shortage of supply, according to CB Richard Ellis Group Inc.
“The growing demand in Japan for modern third party logistics facilities provides an attractive investment opportunity for us,” said Graeme Eadie, senior vice-president of real estate investments at the Canada Pension Plan in a statement.
The fund will be an open-ended fund with 50 percent loan- to-value ratio, according to the release.
Separately, Global Logistic may consider future real estate investment trust listing in Japan, Schwartz said at a press conference held in Tokyo today, declining to elaborate further. The Singapore-based company may also set up a fund management platform in China, he said.
To contact the editor responsible for this story: Andreea Papuc at email@example.com