Logos Group has expanded its Southeast Asia footprint with the acquisition of a redevelopment site in Singapore through a S$1.2 billion ($850 million) fund set up with a pair of long-term institutional partners.
The Sydney-based developer and fund manager made the acquisition through Singapore Logistics Venture 2, a new fund which it wrapped up at the end of 2019 with a mission to acquire and develop high quality, modern logistics properties in the city.
It is believed that Logos has secured equity commitments from Ivanhoé Cambridge and Canada Pension Plan Investment Board (CPPIB) for its latest vehicle in the Southeast Asian financial hub, after the Canadian pension fund managers had supported the initial fund in the series in 2016.
Stephen Hawkins, Logos’ co-founder and managing director for Southeast Asia, told Mingtiandi that the company had acquired the property in western Singapore’s Jurong Industrial Estate on a sale-and-leaseback agreement from SGX-listed engineering firm CSC Holdings.
“This is the first of a series of deals Logos will be rolling out in Singapore where the enduring market fundamentals of the logistics sector continue to remain strong despite the current market conditions,” Hawkins said.
Notching a New Sale-and-Leaseback in SG
With the asset now in hand, Logos will demolish the existing property on the site and develop an institutional grade six-storey ramp-up warehouse at an estimated development cost of S$108 million.
Located at 2 Tanjong Penjuru Crescent, the planned 46,000 square metre (495,140 square foot) built-to-suit facility will feature office space, a cafeteria, rooftop parking and a workshop.
CSC Holdings has committed to a long-term pre-lease on the property of ten years, with practical completion expected by the end of next year.
“Located within one of Singapore’s key logistics hubs and offering close proximity to the seaports, 2 Tanjong Penjuru Crescent is a strategic addition to our portfolio as we look to expand and strengthen our specialist logistics real estate platform in the Singapore market,” Hawkins said.
The planned facility will be Logos’ seventh development in Singapore, bringing its combined gross floor area in the city to almost 500,000 square metres.
Linking Up with Long-term Partners
The milestone comes a year and four months after Logos teamed up with Ivanhoé Cambridge and CPPIB to purchase an industrial complex in Singapore’s Tuas South region through a co-investment said to be worth S$600 million.
The institutional muscle was increased with undisclosed commitments from Bouwinvest Real Estate Investors and LaSalle Global Partner Solutions, which joined the Canadian pair on the co-investment.
With the help of its capital partners, Logos acquired the 151,810 square metre property, which came with 25-hectares (61.8 acres) of land, on a sale-and-leaseback agreement from a local unit of Norwegian solar firm REC.
Expanding in Singapore
Logos is pressing ahead with its Singapore expansion after real estate dealmaking had stalled in the Southeast Asian financial hub earlier, with the coronavirus pandemic triggering a 31 percent drop in investment volume in the first three months of this year compared with the last quarter of 2019, according to CBRE.
But despite the downward trend, investment in the industrial and logistics sector rose 27 percent over the same period to S$513 million, with investors targeting warehouses as consumers’ dependence on e-commerce is expected to outlast the pandemic.
Just over a week ago, Deutsche Bank’s asset management arm, DWS, acquired a 403,000 square foot warehouse in Jurong from an undisclosed private fund for a price said to be between S$75 million and S$100 million.
Following Logos’ entry into the Singapore market in 2016, it has built out a portfolio of six warehouses leased to tenants which include local third party logistics providers and e-commerce companies Yang Kee Logistics and Gan Teck Kar.