Hongkong Land Takes on First Logistics Project with Logos Indonesia JV 

Hongkong Land is embarking on its first-ever logistics project by teaming up with its Indonesian sister firm PT Astra International and warehouse specialist Logos Property in a joint venture to develop and manage warehouses in Southeast Asia’s largest economy.

The new platform will initially focus on projects in the Greater Jakarta area, with the two Jardine Matheson-controlled firms participating through their existing PT Astra Land Indonesia joint venture, the three companies said in a joint statement on Tuesday.

“The establishment of this joint venture with Logos demonstrates our confidence in the logistics sector,” Astra president director Djony Bunarto Tjondro said. “We wish to expand the availability of modern warehouse facilities to support the logistics sector in Indonesia, and to contribute to Indonesia’s national economic growth.”

Widely known for its portfolio of commercial and residential properties in Hong Kong such as Jardine House and the Exchange Square complex in Central, as well as its growing presence in mainland China and Singapore, the newly formed JV marks Hongkong Land’s first step into Asia’s logistics industry as it joins a growing crowd of investors chasing e-commerce-fuelled returns.

Hongkong Land Going Beyond Homes, Offices

This week’s deal comes nearly five years after Logos first entered Southeast Asia by establishing a joint venture with Ivanhoe Cambridge and CPPIB which included projects in both Singapore and Indonesia, with the company, which is now a unit of ESR Group, continuing to expand its presence in the region through new partnerships.

“The JV will leverage the synergies of both companies; Astra Land Indonesia’s track record in the Indonesian property market and Logos’s strong experience in developing sustainable, integrated logistics solutions for international and local customers,” said Stephen Hawkins, chairman of Logos Southeast Asia.

Hawkins added that the venture would help Indonesia meet growing demand for warehouses in a country, where the e-commerce market grew by nearly 50 percent in 2020 from the previous year to reach $21 billion in value, according to a joint report by Bain & Company, Google, and Temasek Holdings.

The Sydney-headquartered logistics specialist, however, declined to disclose financial details of this latest JV or to provide specifics regarding any related projects.

Hongkong Land Grows in Southeast Asia

Jardine Matheson’s participation in the joint venture with Logos will further diversify an Asia portfolio where Hongkong Land already holds 877,300 square metres (9.4 million square feet) of completed office, retail and residential properties.

The developer’s properties span Hong Kong, where it is the single largest landlord in Central district, mainland China, Thailand, Singapore, Malaysia, Vietnam and the Philippines.

In Southeast Asia alone, the Jardine unit has been actively teaming up with local firms over the past two years to develop commercial and condo towers in the region, having formed a JV with Thai firm Singha Estate which completed the ESSE Sukhumvit 36 condo tower in 2020. In the Philippines, the London-listed firm has tied up with local builder Robinsons Land to construct the 45-storey Velaris Residences luxury condominium in Greater Manila’s Pasig City area, with that project also completed in 2020.

Resilient earnings from its office portfolio in Hong Kong’s Central district helped Hongkong Land grow its underlying profit by 12 percent from 2020 to $394 million in the first half of 2021 and narrow its overall net losses, based on the firm’s latest financial statement.

Mingtiandi sought Hongkong Land and Astra for more details regarding the Indonesia venture but was not able to get a response by the time of publication.

Logos Eyes More Sheds in Indonesia

For Logos, the Jardine JV adds more backing for an Indonesia expansion which already received $200 million in fresh funding from a renewed partnership with CPPIB one year ago.

The firm founded by Trent Iliffe and John Marsh has also been expanding its footprint in other Southeast Asian nations. Including teaming up with Sime Darby last September to launch a $200-million Malaysia platform.

In August 2020 Logos entered the Vietnam market with a $350 million joint venture with an unnamed global institutional investor to build a portfolio of warehouses across Ho Chi Minh City, Hanoi and the Greater Danang area.

Property firm Knight Frank is expecting supply in Asia Pacific’s logistics market to remain tight over the near term even as 9 million square metres of additional space are slated for completion this year, due to strong demand and active pre-leasing commitments driven by e-commerce growth.

The real estate consultancy said this rising demand could push rents up by around 1 to 2 percent this year across the region, while leasing rates in the region’s most developed markets could see a steeper increase of 2 to 3 percent.

“With fundamentals propelling the adoption of e-commerce likely to persist beyond the outbreak, we believe that the sector is still in the early stages of maturity and is expected to enjoy an extended cycle of growth that is just beginning to assume momentum,” Knight Frank said in its APAC market outlook report.