Canada’s CPPIB Backs $200M Logos Joint Venture in Indonesia

Logos Property has raised some fresh cash to expand its Southeast Asia footprint, as the Sydney-based logistics developer and fund manager today announced a new joint venture with the Canada Pension Plan Investment Board (CPPIB).

The board, which managed nearly $359 billion in assets as of 30 September, is investing $200 million of that hoard into the new initiative, which aims to develop new warehouses in the Greater Jakarta area to help support the growth of online shopping in Indonesia, according to the joint announcement by the two organisations.

“One of the key investment themes for CPP Investments has been Asia’s growing middle class and domestic consumption,” said Jimmy Phua, managing director and head of real estate investments for Asia at CPPIB. “The growth in Indonesia’s e-commerce market has driven the demand for modern logistics facilities. We are pleased to be furthering our partnership with Logos and strengthening our position in Indonesia’s logistics market.”

The new deal is the second Indonesian joint venture for Logos and CPPIB, which also was an early investor as the developer expanded into Southeast Asia in 2017 and has been one of the biggest backers of logistics real estate development in Asia Pacific, including investments in both developing and core markets around the region with a range of developers.

New Projects on the Way Within 12 Months

“We are seeing growing demand from both multi-national and domestic customers for high-quality logistics space in Indonesia, which is underpinned by the region’s economic drivers of e-commerce, manufacturing and diversification to decentralised supply chains,” said Logos managing director Stephen Hawkins, who heads the firm’s Southeast Asia operation.

According to the statement, Hawkins’s team has lined up a pipeline of opportunities for the joint venture to invest in, setting out a one-year timeline to begin implementing the projects.

Together with a 2017 joint venture that CPPIB and Logos set up with Quebec real estate fund manager Ivanhoe Cambridge, the partners expect the two initiatives to deliver up to $1 billion in new Indonesian warehouses in the coming years, Hawkins said in the statement.

The initial joint venture targeted properties in Singapore and Indonesia, with CPPIB committing $242 million to the initiative as its first investment alongside Logos.

In addition to its latest agreement with CPPIB, Logos last month secured $120 million in debt financing from the International Finance Corporation to support development of two sustainable logistics estates in the Greater Jakarta area.

That deal, which was announced on 14 December, provides the green loans for construction of Logos Cikarang Logistics Park and Logos KLOG Cibitung Logistics Hubare, both of which are targeting certification under Singapore’s Green Mark code for sustainable buildings and are designed to comply with the IFC’s green-building standards.

Logos Keeps Rolling in Southeast Asia

This latest Indonesian joint venture marks another victory for Logos after Singapore’s ARA Asset Management bought a controlling stake in the company one year ago.

In October of last year, the logistics specialist founded by Trent Iliffe and John Marsh officially expanded into Vietnam with the acquisition of a site outside of Hanoi for a $350 million joint venture with an institutional investor believed to be Singapore’s GIC.

CPPIB and Ivanhoe Cambridge also last year backed an $850 million Singapore-focused Logos fund that acquired a property in western Singapore’s Jurong Industrial Estate from CSC Holdings for partial redevelopment under a deal which also included a lease-back element for the SGX-listed engineering firm to continue occupying the premises.

Beyond Southeast Asia, Logos teamed up with Ivanhoe Cambridge to acquire a Melbourne site in August of last year for $36.4 million, with plans to break ground on a new logistics development on the plot in the industrial suburb of Broadmeadows early this year.