LaSalle Investment Management has closed its fourth Japanese logistics fund after raising $350 million in new cash to expand its fleet of logistics facilities in the Land of the Rising Sun.
The fund-raising haul paves the way for LaSalle to invest over $1 billion for warehouse developments and value-add opportunities in Japan, the US-based real estate investment manager announced today.
The new vehicle, JLF IV, will primarily target the Greater Tokyo and Osaka markets. LaSalle’s JLF series has completed more than $3 billion of investments and has made $1.5 billion of total equity commitments across 34 deals since its inception in 2004. The second and third funds in the series closed in 2007 and 2013, respectively.
“With JLF IV, we are responding to the strong investor appetite for warehouses, which are now considered an investment grade asset class,” commented Yasuo Nakashima, CEO of Japan and fund manager at LaSalle Investment Management. “Favourable market fundamentals are supportive of the Fund’s investment strategy and allow us to identify opportunities at the asset level.”
LaSalle Steps Up Its Asian Investments
LaSalle, an independent subsidiary of NYSE-listed JLL, has around $59 billion of global investments under management as of Q2 2017. The firm’s Asia Pacific portfolio is reported to total $7.8 billion as of this past March, with Japan accounting for $5.34 billion (68.5 percent of the regional total), according to a Reuters report.
The new vehicle adds to LaSalle’s investments in the region after the firm launched its Asia Opportunity V Fund (LAO V) in August 2016. A year later, LaSalle announced that it was boosting the fundraising target for that vehicle from $750 million to $1 billion, after achieving a total of $700 million in secured and pending commitments.
LAO V, the fifth in a series of closed-end, pan-Asia opportunistic funds, targets real estate investments in Japan, Australia, mainland China, Hong Kong, Singapore, and South Korea. The vehicle is focussed on mispriced assets with value-add opportunities, along with some development risk aimed at logistics markets in China and Korea.
Global Capital Chases Japanese Warehouses
Global investors remain keen on Japanese logistics properties amid attractive yields and strong demand for modern facilities. Last month, German-based insurer Allianz Group committed $100 million to a Japan-specific fund managed by e-Shang Redwood (ESR), joining a roster of investment heavyweights backing the pan-Asian warehouse builder.
Some 6.3 million square metres of logistics assets are also changing hands in Japan through the buyout of Global Logistic Properties (GLP). The Singapore-based warehouse builder, which has a total global footprint of 56 million square metres, is in the process of being acquired by a Chinese investment consortium for $11.6 billion. Ninety percent of GLP’s Japanese portfolio is located in Tokyo and Osaka.