By SAM HOLMES
SINGAPORE—Global Logistic Properties Ltd., a listed subsidiary of Government of Singapore Investment Corp., said Thursday it formed a US$500 million joint venture fund with the Canada Pension Plan Investment Board to develop logistics facilities in Japan.
The joint venture represents the first direct investment in the Japanese property market by Canada Pension Plan, which manages 153.2 billion (US$156.8 billion) Canadian dollars in funds, and comes as GLP has been expanding in its two key markets, China and Japan.
GLP Deputy Chairman Jeffrey Schwartz said the group is seeing solid demand for logistics development in Japan. He added in a statement that the fund will be GLP’s exclusive vehicle for logistics development in Japan.
Each partner in the joint venture will contribute US$250 million of equity over three years into the Japan Development Fund, which will be an open-ended fund with a long-term investment horizon. GLP said it has identified a site in Tokyo for its first potential development but didn’t elaborate on the size or nature of the property.
The fund will focus on developing assets in Tokyo and Osaka and will have pre-net gearing of 50% once the fund is stabilized, the statement said.
GLP’s shares were up 4.2% at 1.74 Singapore dollars (US$1.45) Thursday, compared with a 0.2% rise in the benchmark Straits Times Index.
The company’s stock, which was listed on the Singapore Exchange in October, has fallen 22% so far this year, underperforming the STI’s 9% decline, as concerns about the outlook for the Chinese economy weighed on the group.
The property group is currently in an expansion drive, having acquired a 53% stake in China’s Airport City Development Co. Ltd.—which is the sole developer of airside cargo handling and bonded warehouse logistic facilities for Beijing Capital International Airport—for US$375 million earlier this year.
It is also in final negotiations to acquire a Japanese portfolio of real estate from Blackstone Group’s real estate arm for up to ¥140 billion (US$1.82 billion), making it the biggest property deal in Japan in two years, people familiar with the transaction said in July.
–Matthew Allen contributed to this article.
Write to Sam Holmes at email@example.com