Gaw Capital Completes Purchase of 7 Greater Tokyo Sheds From Blackstone

Hong Kong’s Gaw Capital Partners has completed its acquisition of seven Japanese logistics assets from Blackstone, with the family-controlled firm planning to unlock the “hidden value” of the portfolio through a series of value-add strategies.

The warehouse set spans 253,200 square metres (over 2.7 million square feet) of net rentable area in popular logistics hubs across Greater Tokyo, Gaw said Thursday in a release. The seven sheds are located in Chiba, Joso, Hasuda, Hashimoto, Atsugi and Ashikaga, with most within an hour’s drive of central Tokyo.

Gaw did not disclose the identity of the seller or the transaction value, but Mingtiandi reported in early November that the firm was nearing a deal to acquire seven warehouses owned by funds managed by Blackstone for JPY 80 billion ($540 million). On Thursday, a Blackstone source confirmed to Mingtiandi that the private equity giant was the vendor.

“We are delighted to have completed our first logistics portfolio in Japan,” said Isabella Lo, managing director and head of Japan at Gaw Capital. “With rising demand driven by continued urbanisation and e-commerce, logistics assets in Japan continue to mature as an institutional asset class, increasingly attracting capital from both domestic and international investors.”

Sustainability on the Way

The portfolio’s seven assets include the 32,903 square metre Atsugi II Logistics Center, a development of Japanese conglomerate Orix in Kanagawa prefecture south of Tokyo, and a 34,843 square metre Hasuda warehouse built by Sagawa Global Logistics in Saitama prefecture north of Tokyo.

Gaw managing director and principal Joseph Chan said the firm plans to add ESG elements such as solar panels across the portfolio to reduce the carbon footprint, as well as obtain green building certifications to ensure that the assets fulfil the ESG requirements of international tenants.

“We also see strong value-add potential in several properties across the portfolio, which will be unleashed by Gaw Capital with our experience and track record across other APAC regions,” Chan said. “Responding to Japan’s rising demand for cold storage facilities, our value-add strategy will include capturing the opportunity in this niche market by bringing in our expertise in recent successful cold storage conversions regionally.”

Gaw noted that Japan’s e-commerce activity saw impressive growth during the COVID-19 pandemic, reaching JPY 20 trillion (now $150 billion) in 2021 and leading to increased demand for logistics facilities in a country where supply lags that of other developed markets.

Turning Japanese

Securing the Blackstone portfolio is the latest Japan milestone for Gaw Capital, which has turned its attention to Asia’s second-largest economy this year.

In May, Gaw announced that it had acquired 32 residential properties in Tokyo and other key cities on behalf of Qatar Investment Authority, the Mideast emirate’s sovereign wealth fund, adding to its growing portfolio of Japan rental apartments.

Just one month earlier, the Hong Kong firm expanded its data centre holdings into Japan with the acquisition of a Greater Tokyo site for a 40-megawatt IT campus.

In January, Gaw announced that it had backed US investment firm Invesco’s $3 billion privatisation of the 18-property Invesco J-REIT, which stands as Japan’s largest office transaction of this year.

Gaw reached a $1.2 billion first closing of its Gateway Real Estate Fund VII in November of last year, with the company having identified Japan as one of the primary targets for that strategy. The firm has raised equity of $21.9 billion since 2005 and had $34.3 billion in assets under management as of the second quarter of 2022.