Singapore’s Global Logistic Properties (GLPL.SI) said on Thursday that it has formed a joint venture with Canada Pension Plan Investment Board to develop logistics facilities in Japan, as it looks to tap increasing demand in the country for large-scale warehouse rental.
Warehouse operators and investors see growing appetite from companies for the flexibility of renting logistics facilities rather than actually owning them, and the March 11 natural disasters highlighted the benefits of big and modern buildings.
The two will each invest US$250 million ($300 million) of equity over a projected three years, GLP said, adding that it was targeting leverage of 50% loan-to-value.
GLP already owns warehouses in Japan and China. Canada Pension Plan Investment Board invests the assets of the Canada Pension Plan, managing a fund that totals C$153.2 billion ($188.4 billion).
Increasing demand for logistics facilities on the back of growth in online shopping is also boosting the popularity of large-scale rental warehousing in Japan.
Australia’s Goodman Group (GMG.AX) last month acquired a 60,000 square metre site in the Osaka Bay area to build multi-tennant logistics centres.
Prologis (PLD.N), one of the world’s largest owners of warehouses and distribution centres, last week completed a multi-purpose warehouse just north of Tokyo.
A CB Richard Ellis report showed that the average vacancy rate of warehouses and logistics properties in greater Tokyo area fell to 4.2% in April-June, its lowest since the fourth quarter of 2007.
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