GLP Buys Multi-Level Osaka Warehouse Through Japan Income Fund

Asia’s biggest logistics developer GLP has acquired a recently built multi-level warehouse east of Osaka, adding to the company’s $125 billion global portfolio as shed vacancy remains below 2 percent in the Japanese city.

The Singapore-based company purchased the roughly 16,297 square metre (175,419 square foot), four-storey facility through its GLP Japan Income Fund, GLP announced in December. The property, now renamed GLP Higashi-Osaka, was developed by Tokyo-based Broad Edge Advisors.

The building is exclusively occupied by SBS Logicom Co, a Tokyo-based transportation services firm and repeat GLP customer, which will remain in the property following the acquisition, GLP said. The site has a 50-year fixed-term leasehold.

Logistics Hub

Completed in June of last year, the facility is located at 1-chome-2-10 Nunoicho in Higashiosaka, an industrial city in Osaka prefecture. The site is about 17 kilometres (10.6 miles) from central Osaka, a roughly 25-minute drive away, and is situated near the Higashi Osaka Truck Terminal, a regional logistics hub, and just over 2 kilometres from the Mizuhai exit on the Hanshin Expressway Route 13.

The warehouse, which sits on an 8,000 square metre site, earned a B+ from Japan’s CASBEE green building certification. According to an account in Nikkei Real Estate Market Report, the property was sold by the developer, Broad Edge Advisors, which was reported to be planning the project in early 2021.

GLP in recent years has focused on development in the Kansai region, according to a prepared statement by Yoshiyuki Hosa, president of GLP Japan, referring to an area that is home to Kyoto, Osaka and Kobe on the country’s main island of Honshu. He indicated that GLP is considering adding new properties in Higashiosaka, a major logistics nexus in the region.

Elsewhere in Osaka prefecture, the company is building GLP ALFALINK Ibaraki 1, a six-storey logistics facility with a total floor area of around 165,000 square metres in Ibaraki, a city northeast of Osaka. GLP announced the start of construction in January 2022.

Launched in August 2020, GLP Japan Income Fund is the largest open-ended private logistics fund in Japan. The vehicle was seeded with 11 newly developed assets in Greater Tokyo and Osaka. A second close in January 2021 brought the fund to JPY 560 billion ($5.4 billion) in assets under management.

Earlier this month, GLP launched GLP Capital Partners (GCP), the product of a corporate reorganisation that created a dedicated alternative asset manager with about $125 billion in global assets under management across 46 funds.

Osaka Strategy

Aside from GLP, other active players in the Osaka area include Hong Kong-listed ESR, which is building a $1.5 billion logistics park northwest of the city in Hyogo prefecture’s Kawanishi.

The two-phase ESR Kawanishi Distribution Centre will consist of two six-storey warehouses totalling 197,797 square metres of gross floor area, the logistics developer announced in March of last year. ESR noted that rising e-commerce and the automation of warehouse operations had helped make Greater Osaka a highly strategic logistics market.

Net absorption in the Osaka logistics market was 84,000 square metres in the third quarter of last year amid continued strong demand, JLL reported. The average vacancy rate was 1.9 percent, rising 20 basis points quarter-on-quarter but unchanged compared to the same period of 2021.

The market saw JPY 260 billion of total investment during the first three quarters of 2022, the brokerage found. Rents grew 0.6 percent year-over-year in the third quarter, driven by the relatively high rents of new completions.

GLP has been busy elsewhere in Japan, with the company starting construction last month on GLP Sayama Hidaka III, a 67,000 square metre logistics facility in Saitama prefecture’s Hidaka city, as well as GLP Chiba Kita, a 24,000 square metre project in Chiba, capital of Chiba prefecture.

And this month, GLP announced it had completed GLP Hiroshima II, a 49,792 square metre asset in Hiroshima, and GLP ALFALINK Nagareyama 5 and 6, a pair of logistics buildings in Chiba prefecture’s Nagareyama measuring a total of 234,000 square metres.