GLP Launches $2.6B Open-Ended Japan Logistics Fund

GLP today announced the launch of a JPY 280 billion ($2.6 billion) Japan logistics vehicle as demand for warehouse assets in core markets continues to grow among institutional investors.

The company, which is the second-largest logistics developer in the world and the largest based in Asia has established GLP Japan Income Fund (GLP JIF) as a private open-ended vehicle, which it has seeded with a set of 11 newly developed logistics assets in Greater Tokyo and Osaka, according to a statement by the company.

In addition to GLP’s contribution, the new venture, which the company says is the largest of its kind in Japan, is said to already have received backing from pension managers, finance and insurance companies, as well as sovereign wealth funds, with most participants joining as new partners for the Singapore-based developer and fund manager.

Fully Leased Assets Shifted to Core Fund

“GLP Japan Income Fund represents a significant milestone for our business and highlights the strength and track record of GLP as an asset manager and developer,” Yoshiyuki Chosa, president of GLP Japan said in a statement. “Customer demand remains strong and we will continue to raise the bar by creating signature developments that drive innovation in the Japan logistics real estate industry.”

The 11 assets in the initial portfolio are reported to be 100 percent leased, and include six LEED Gold and Platinum certified projects, with GLP projecting that the properties will provide stable long-term cash yields to investors.

The announcement of the fund launch today comes eight months after GLP first revealed plans for the open-ended fund, and just over a year and a half following its December 2018 establishment of GLP Japan Development Partners III, a fund backed by CPPIB, as well as other investors, which was planned to reach JPY 625 billion in assets under management when fully invested.

In May of 2019, Allianz Real Estate announced that it would invest $600 million in GLP ventures in Japan and China, without specifying target vehicles for the allocation.

Japan Sprouts Sheds

Among the likely candidates for GLP’s new vehicle is GLP Alfalink Sagamihara, a 650,000 square metre mega-project which the company began developing in November of last year. That project is part of a wave of new warehouse projects in Japan as developers rush to meet demand for new logistics facilities from e-commerce providers and other tenants.

Those growing occupier requirements had helped the Singapore-based firm to sell its 585,631 square metre GLP Yachiyo II facility in Chiba prefecture near Tokyo to Mizuho Financial Group for $132 million during the second quarter of this year.

ESR, GLP’s most prominent competitor in Asia Pacific, is also moving quickly in Japan. The Warburg Pincus-backed developer today announced that it had leased an entire 78,000 square metre facility near Tokyo to a logistics unit of Daiwa Corporation nearly one year before that warehouse project is due to be completed.

In late March ESR had announced plans for a 32,227 square metre warehouse project near Tokyo funded by its Japan Logistics Fund III (RJLF3), a joint venture set up with Dutch pension fund APG and an Asia-based sovereign wealth fund in 2019.

GLP Expands Assets

“Investor interest from domestic and international investors in GLP Japan Income Fund was very strong,” said GLP managing director of fund management Ralf Wessel, pointing to the level of interest as a marker of GLP’s strength as a developer and fund manager.

In recent months, GLP has announced $4.7 billion of logistic real estate vehicles globally, including reaching a final close on its China Income Fund I (CIF I) in April with the company having said that it is targetting RMB 15 billion ($2.1 billion) for that core property vehicle.

With $19 billion in assets under management in Japan and some $89 billion under its stewardship globally, according to today’s announcement, GLP ranked third among among Asia Pacific property fund managers in a recent survey by industry group ANREV with $38.3 billion in AUM around the region.

In Japan the company is also the sponsor and manager of Tokyo-listed GLP J-REIT with the company noting in its announcement that, as it launches the new private vehicle, it remains committed to its publicly listed trust.