GLP, CPPIB establish $877m Japan joint venture
The Japanese arm of Singapore-listed warehouse operator Global Logistics Properties (GLP) and Canada Pension Plan Investment Board (CPPIB) have established a joint venture that will invest an initial JPY100 billion ($877 million) in local logistics projects.
The vehicle, GLP Japan Development Venture II (GLP JDV II), is expected to begin construction of new projects this year, according to a statement, and to reach $2 billion over the next three years. It will sell mature assets to GLP J-REIT, the company's real estate investment trust. Commitments to GLP JDV II are split evenly between GLP and CPPIB.
GLP JDV II will be seeded with logistics park GLP Nagareyama, the company's largest project in Japan, with about 3.4 million square feet in total floor area. Costs of construction on GLP Nagareyama are expected to be about JPY59 billion.
This is a follow-on venture to GLP JDV I, the first Japan development venture between GLP and CPPIB. It was launched in September 2011 and has $2.4 billion of projects under development, at 92% of its investment capacity.
CPPIB and GLP cited the strong customer demand for logistics infrastructure in Japan, driven by a limited supply of modern facilities and ongoing supply chain modernization, as factors in their desire for further long-term investments in the country.
China has also seen several ventures of this kind in recent years by international investors, including GLP and CPPIB. In December, CPPIB and Goodman Group jointly committed another $1.25 billion to their China logistics joint venture, established in 2009 with $300 million. GLP formed a $7 billion fund for logistics development last July in which it holds a 50% stake.
GLP launched its latest China logistics fund last July, with initial commitments of $3.7 billion from seven investors, five of whch are Asian. In addition to developing its own funds, GLP has itself received significant investment from Chinese investors. In 2014, a consortium contributed $2.5 billion, taking a stake in GLP and its China subsidiary.
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