The Singaporean sovereign wealth fund, Government Investment Corporation (GIC), has partnered with Mega Manunggal Property (MMLP), a Jakarta-based developer of logistics properties, to invest in warehouse projects in Indonesia.
The two firms will be spending a combined S$1 billion ($720 million; €660 million) to develop projects totalling 5.4 million square feet of net lettable area in a period of three years, MMLP said in a filing with the Jakarta Stock Exchange.
The projects will be developed by Mega Khatulistiwa Properties (MKP), a joint investment company set up between MMLP and Reco Indolog, a subsidiary of GIC.
The warehouses will be developed for the FMCG, automotive, e-commerce and pharmaceutical sector, with a focus on greater Jakarta and other Indonesian cities including Surabaya, Medan and Makassar, according to the company statement.
Construction for three integrated warehouses has started, which have a total net lettable area of over 1.2 million square feet.
“We continue to look for land that is suitable for warehouse including good access and infrastructure. Land that we plan to acquire would have been agreed upon and selected by prospective tenants,” Fernandus Chamsi, chief executive officer of MMLP said in the filing.
GIC has been an active investor in logistics properties globally. In July, the investor made its first logistics investment in South Korea with the $130 million acquisition of Hyundai Logistics Distribution Center in partnership with ADF Asset Management, an asset management company specializing in logistics investments.
According to GIC’s 2015 annual report, the state fund has 7 percent of its portfolio in real estate investments. In July, it announced an annualized rate of return of 4 percent in the 20-year period ending March this year from its overall portfolio.