GLP to raise $9bn Japan real estate fund amid warehouse boom
GLP, Asia’s greatest logistics investor, has launched what it hopes will grow to be a report $9bn actual property fund in Japan as a pandemic-driven ecommerce increase triggers a rush for warehouse house.
The massive fund is searching for to benefit from the truth that a lot of Japan’s logistics infrastructure is but to be modernised and is now more and more weak to employee shortages amid the relentless rise of on-line retail.
GLP mentioned on Tuesday that it had raised ¥311bn ($2.7bn) from sovereign wealth funds, pension funds and insurance coverage firms for the most important ever Japan-focused personal actual property fund.
Often known as Japan Growth Companions IV, the fund is anticipated to have greater than ¥1tn value of belongings beneath administration by the point it’s absolutely deployed.
The fundraising comes as many Japanese cities have just lately emerged from months beneath a state of emergency, with many individuals’s shopping habits modified radically.
“Japan is the fourth-largest ecommerce market. And the pandemic helped ecommerce develop additional. So it’s a very robust tailwind,” mentioned Yoshiyuki Chosa, president of GLP Japan.
The rise in on-line retail has uncovered a number of the flaws in Japan’s generally antiquated logistics operations. Japanese warehousing infrastructure and logistics operations are sometimes run on a comparatively small scale, or are managed by massive producers for their very own unique use.
Japan’s logistics market, mentioned Chosa, had traditionally been bothered by an extra of middlemen, bringing excessive prices and decrease margins. In the meantime, there was a necessity for better competitiveness within the provide chain, propelled partially by Japan’s shrinking workforce and ageing inhabitants.
“So there’s numerous room to develop,” he mentioned, including that the fund would goal large-scale property belongings in Japan and was prone to deploy an preliminary $4bn in lower than 4 years.
Research printed final yr by Jones Lang LaSalle confirmed that whereas total actual property transaction volumes in Japan fell throughout the first 9 months of 2020, logistics funding had surged.
Massive international logistics firms have just lately noticed the widening hole between the calls for of ecommerce in Japan and the dearth of the sort of innovative automated logistics centres which might be required for that to run easily.
Final November, DHL Specific mentioned it had sunk ¥9.9bn into its largest-ever facility funding in Japan: a 21,000 sq. metre distribution centre exterior Osaka.