CPPIB Backs New $5.6B GLP Japan Logistics Fund

Warehouse developer and investment manager Global Logistic Properties (GLP) has set up the largest fund ever targetting Japan’s logistics real estate sector, according to an announcement Saturday by the Singapore-based firm.

The Canada Pension Plan Investment Board (CPPIB) will be the largest investor in the JPY 625 billion ($5.6 billion) vehicle, according to GLP, with several other institutions, including sovereign wealth funds and pension funds also joining the new fund.

GLP Japan Development Partners III (GLP JDP III), is the developer’s third investment vehicle targetting the Japan market, and follows the $2 billion GLP JDP II fund, which GLP and CPPIB jointly announced in 2016.

New Fund Seeded with $1.2B Greater Tokyo Project

“The establishment of the largest ever Japan-focused logistics private real estate fund is a testament to the strength of our team on the ground and the solid track record in acquiring attractive sites in Japan to meet customers’ needs in prime locations,” GLP co-founder and CEO Ming Mei said in a statement. “GLP JDP III enables us to continue capturing significant customer demand while further enhancing our ‘Network Effect’.”

The new fund will be seeded with GLP Sagamihara, a $1.2 billion logistics development in the Greater Tokyo area, which GLP acquired the site for in December 2016. The company now expects to develop the project over multiple phases into a distribution centre covering over 650,000 square metres (7 million square feet) of gross floor area, according to the statement.

GLP, which continues to dominate Asia’s warehouse development sector, says it has leased 1.3 million square metres (13.9 million square feet) of facilities in Japan so far in 2018, with all of its new construction starts this year fully leased before breaking ground.

With the establishment of GLP JDP III, GLP says that its Japan operation will manage over $18 billion in assets across four private equity funds and its Japan-listed real estate investment trust, GLP J-REIT.

CPPIB Puts a Fresh $700M into Japan

CPPIB, which had assets of C$368.3 billion as of September 30^th, is investing $700 million into GLP JPD III, according to a report on Sunday by industry publication PERE, with the Toronto-based investment manager said to be committing its resources primarily to co-investment opportunities. CPPIB also invested in GLP’s first Japan fund.

“We are pleased to extend our successful partnership with GLP in Japan and globally, and to cornerstone GLP JDP III,” CPPIB managing director and head of real estate investment for Asia, Jimmy Phua said in a statement. This new fund builds on the success of our earlier programs and underscores our long term commitment to investing in Japan.”

In addition to their Japan partnerships, CPPIB have also announced cooperative investments this year in Europe and India.

In November, the CPPIB announced that, together with its compatriots from British Columbia’s Quadreal Property Group, it was entering into a €2 billion (then $2.29 billion) joint venture to invest in European logistics facilities, with the two Canadian firms committing a total of €1 billion to the project.

That deal was preceded in September by September of this year by GLP revealing that it was partnering with Mumbai-based Everstone in its India logistics joint venture with CPPIB. The Canadian firm had announced a $500 million investment into the IndoSpace logistics platform in 2017, and earlier this month GLP revealed that IndoSpace is now operated as joint venture between Everstone and the Singaporean firm.