GIC partners with Indonesia's MMP for logistics JV

The partnership - which represents GIC's first foray into Indonesian logistics - will seek to more than triple MMP's leasable warehousing area to 500,000 square meters, according to a statement. This effort is expected to leverage increasing corporate demand for sophisticated inventory systems in the Jakarta and Surabaya regions, which cannot be fulfilled by traditional warehouses.

"We are attracted by the long-term growth of this sector, which is underpinned by the strong consumption of Indonesia's rapidly rising middle class," said Loh Wai Keong, GIC Real Estate's managing director and co-head for Asia. "We believe GIC's knowledge and experience investing in logistics both in Asia as well as other global markets will add value to this partnership."

Established in 2010, MMP constructs commercial properties including office buildings and built-to-suit warehouses. It posted a 15% year-on-year increase in revenue during the 2015 financial year to IDR163.5 billion ($12.4 million). Profit, however, fell 60% during the year to IDR114.4 billion, with the company attributing the decline to lower changes in fair value of properties and foreign exchange losses.

In late 2014, GIC agreed to invest $500 million alongside Indonesia's Rajawali Group in domestic property projects. The sovereign wealth fund demonstrated its confidence in Indonesia's growth potential earlier this year with a IDR5.2 trillion investment in supermarket operator Trans Retail, which operates stores in the country under the Carrefour and Transmart brands.

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• Topics
• Southeast Asia
• Infrastructure
• Support services
• Real estate
• GIC Private
• Logistics