GLP Reaches $3.7B Final Closing of Japan Development Fund, Targets $9.1B in AUM

GLP on Wednesday announced the final closing of its flagship Japan logistics development strategy with JPY 412 billion ($3.7 billion) in total commitments, putting an exclamation point on what was already the largest-ever private fund targeting real estate in the country.

The capital raise makes GLP Japan Development Partners IV about 65 percent larger in size than its predecessor fund, GLP JDP III, which closed on JPY 250 billion in equity in 2018. The fourth edition of the series is expected to reach over JPY 1 trillion ($9.1 billion) in assets under management when fully deployed, GLP said in a release.

The latest funding round for GLP JDP IV totalled JPY 101 billion and stemmed from nine international and domestic investors, the company said without disclosing any names of the vehicle’s backers. Last October, the Canada Pension Plan Investment Board revealed its commitment of JPY 110 billion to the fund, which had just closed on JPY 311 billion at the time.

“The successful GLP JDP IV fundraise on such a short time scale is another strong vote of confidence from our investors,” said Ralf Wessel, managing director for fund management at GLP. “We see a significant interest uptick among domestic institutions who have participated in our development fund series for the first time following a significant representation in our core, open-ended Japan income fund.”

Sustainable Sheds

GLP JDP IV was more than two-times oversubscribed based on the initial target size of JPY 300 billion, closing at its JPY 412 billion hard cap. The fund aims to develop warehouses in the greater Tokyo and Osaka regions to help e-commerce tenants meet ever-tighter delivery expectations.

With investors increasingly adopting sustainability targets, GLP plans to incorporate solar panels in its new facilities to offset energy usage and enable its institutional backers to earn ESG points with their cash returns. Amenities at the projects will include on-site day care facilities that support the well-being of workers and local communities.

Meanwhile, the logistics giant’s open-ended GLP Japan Income Fund, launched in 2020, has surpassed JPY 300 billion ($2.6 billion) in capital commitments to date. More than 50 international and domestic institutional partners have backed the core warehouse strategy, which invests in “high-quality and well-designed properties” in Japan, GLP said.

GLP’s logistics business in Asia’s second-biggest economy spans 10 million square metres (108 million square feet) of gross floor area across completed assets, properties under development and land holdings, with an overall lease ratio of 99 percent.

With the establishment of GLP JDP IV, the group has over $30 billion in logistics assets under management in Japan across five private funds and a listed J-REIT.

Japan Projects Grow

A growing number of global players have included Japan logistics in their strategies, enticed by a transparent market, low borrowing costs and booming e-commerce.

Last March, CBRE Investment Management (then known as CBRE Global Investors) said it had raised $265 million dedicated to Japanese logistics opportunities in conjunction with its latest Asia Pacific value-add fund, which reached a final close on $1.74 billion in capital in October.

Hong Kong-listed ESR announced last July that it had expanded its existing Japan development venture with Dutch partner APG Asset Management by JPY 75 billion to bring that fund to JPY 150 billion in equity, targeting development opportunities in the nation’s major urban hubs.

In August, Australian industrial developer Goodman said it planned to build a 176,000 square metre distribution centre in Japan’s Ibaraki prefecture near Tokyo.

In November, LaSalle Investment Management announced the acquisition of a Tokyo warehouse on behalf of its open-ended Japan fund as part of a JPY 17 billion deal that also included the purchase of seven residential properties spread across Osaka and Nagoya.