Ivanhoe Cambridge and CPPIB Team with Logos for $484 Mil SE Asia Warehouse Platform

Australia and China-based Logos Property has secured new capital commitments from Canadian fund managers CPPIB and Ivanhoe Cambridge that give the logistics real estate developer a $484 million platform for developing and acquiring warehouse facilities in southeast Asia, according to a Mingtiandi interview today with the head of Logos’ southeast Asian operation.

CPPIB and Ivanhoe Cambridge are backing a pair of entities set up by Logos in Singapore and Indonesia to keep pace with growing demand from manufacturers and consumers for modern distribution facilities in the pair of top five southeast Asian economies.

CPPIB, which is partnering with Logos for the first time, is committing a total of $242 million to the two vehicles. Ivanhoe Cambridge, which invested with Logos in Singapore last year, is increasing its commitment to the southeast Asian ventures and will be an equal partner with CPPIB in the two entities. Logos will retain a stake in both platforms while acting as the operating partner.

Building From Logos’ Singapore Base

Logos entered southeast Asia last year through a strategic partnership with local firm Yang Kee Logistics, which Ivanhoe Cambridge backed with a $110 million capital commitment. Now the Aussie-managed warehouse builder plans to use its new funding to scale up its southeast Asian portfolio.

“Our intention was always to start in Singapore and expand into other southeast Asian markets,” Managing Director of Logos Southeast Asia Stephen Hawkins told Mingtiandi in an interview. And Indonesia seems to be first on the list for Hawkins’ expansion program.

“260 million people is the main thing,” the veteran logistics developer said, “But you add onto that a young population, a fast-growing middle class and a voracious appetite for consumption, and Indonesia was a market that we found appealing.”

CPPIB said that it is investing S$200 million ($142 million) in return for a 48 percent stake in the developer’s Singapore-focused entity, Logos Singapore Logistics Venture (LSLV).

Ivanhoe Cambridge had originally backed LSLV last year when it was known as Logos Southeast Asia Venture, and the real estate investment arm of Quebec fund manager Caisse de dépôt et placement du Québec is said to be matching CPPIB’s commitment to the Singapore investment vehicle.

“Ivanhoé Cambridge welcomes CPPIB as our co-investment partner with LOGOS in Singapore and Indonesia,” said Rita-Rose Gagné, President, Growth Markets, at Ivanhoé Cambridge. “Increasing our allocation reaffirms our view of the growth potential in Southeast Asia and our confidence in LOGOS as a best-in-class logistics real estate specialist in Asia-Pacific.”

In the past year, Logos has adjusted its southeast Asian strategy around country-based vehicles focused on specific markets. LSLV has been seeded with two fully-leased existing multi-storey logistics facilities acquired through the partnership with Yang Kee, and the company has already secured one development opportunity.

Capitalising on Indonesian Opportunities

In addition to the Singaporean commitment, CPPIB is investing $100 million into LILV, citing the Indonesian platform’s strong pipeline of development opportunities in Greater Jakarta.

“The logistics sector in Southeast Asia continues to grow as a result of the burgeoning middle class and the rise of e-commerce, and presents an excellent opportunity for a long-term investor like CPPIB,” said Jimmy Phua, Managing Director, Head of Real Estate Investments for Asia at CPPIB.

Logos Ready to Build Out Its Pipeline

Both ventures are focused on developing and acquiring modern logistics facilities in their respective markets, and for Logos the next challenge is to go out and implement the projects in its pipeline.

“In the year since we set up in Singapore we have been finding land and securing commitments from our customer base,” Hawkins pointed out. Logos has also been busy establishing a team in Indonesia and expanding its operation in Singapore.

And the executive, who formerly worked with Singaporean developer Ascendas and Australian industrial specialist Goodman, is confident of his team’s ability to implement its newly earned mandates. “I think you will see some new announcements from us soon,” Hawkins noted.