CBRE Global Investors has announced the closing of a co-investment vehicle as part of the Asia Value Partners V fund, taking aim at logistics development projects in Japan.
The fund management unit of CBRE Group raised $265 million in equity for the add-on venture just over one year after reaching a final close for its Asia Pacific value-add strategy.
With AVP V nearing full deployment, the co-investment will enable a select group of limited partners to capitalise on opportunities that have been sourced on an off-market basis, CBRE GI said in a release late last week. Adrian Baker, president and chief investment officer of APAC direct real estate at CBRE GI, said the limited partners welcomed the chance to co-invest alongside AVP V.
“We believe the logistics sector in Asia Pacific has demonstrated resilience and added relevance amidst COVID-19,” Baker said. “It is well poised to benefit from the weight of institutional capital that remains under-allocated to logistics, particularly in this part of the world. We are very delighted to receive such strong and swift support from our investors.”
Adding to a Sold-Out Strategy
The Los Angeles-based investment manager has identified and approved four logistics development projects for investment through the newly established vehicle, all of which are located within the Greater Tokyo area or in Fukuoka on the island of Kyushu and have vacancy rates lower than 1 percent.
In a report released earlier this year, CBRE’s Japan unit predicted that demand for large, multi-tenant logistics facilities would reach more than 2 million square metres (21.5 million square feet) this year, marking the third-largest jump in demand ever, behind the only the 2019 and 2018 increases.
The consultancy tagged e-commerce as the major driver of demand, with online shopping having grown by more than 11 percent annually since 2008.
AVP V held a final closing in February 2020 with capital commitments of $900 million. The tacked-on co-investment vehicle will bring the APAC value-add programme’s fifth iteration to $1.17 billion in size, CBRE GI said.
Commitments for AVP V were secured from sovereign wealth funds, pension funds — including the State Board of Administration of Florida — and other institutional investors from across North America, Europe and the Middle East.
The firm said at the time of the final closing that, excluding co-investments, AVP V was expected to have total purchasing power of $2.3 billion after leverage.
Most of the fund’s capital has been committed to logistics assets and development projects in Japan, China and South Korea. AVP V came on the heels of Asia Value Partners IV, which achieved a final closing of $1 billion in late 2017.
CBRE GI has looked for further opportunities in Japan after announcing last June that the firm had completed a JPY 140.4 billion ($1.31 billion) sale of all assets from a logistics portfolio, ending a three-month-long series of disposals of 169 industrial properties in the country.
From the sale on behalf of an investor consortium that included AVP IV, the firm was able to achieve a more than 33 percent markup to the price at which it acquired the properties in 2016, according to a statement from CBRE GI.
After the sale, CBRE GI executives said they were seeking more acquisitions in Japan’s industrial real estate sector.
“CBRE Global Investors continues to be focused on Japan logistics and are actively deploying capital to opportunities where we can create defensive, core assets through various value-add and development initiatives,” Baker said at the time.
CBRE GI had $122.7 billion in assets under management as of 31 December 2020. It operates independently as an affiliate of US-based real estate group CBRE.