Global Logistic Properties (GLP) and Canada Pension Plan Investment Board (CPPIB) have extended a 50:50 joint venture between the two organisations aimed at funding developments in the greater Tokyo and Osaka areas.
The Singapore-listed logistics real estate developer and investment manager and the Canadian pension fund have committed an additional $316 million of equity each to their GLP Japan Development Venture. The partners set up the JV in September 2011 each committing an initial $250 million.
The new commitments therefore bring the total equity committed to the JV to $1.132 billion and, assuming leverage on a 50 percent loan to value basis, the investment capacity of the venture extends to $2.2 billion.
GLP announced the new commitments today stating also the “investment identification period” of the venture has been reset for another three years from the signing date. The venture has already made outlays for four development projects totalling $469 million, which GLP said had been executed ahead of its original three year investment period.
Jeffrey Schwartz, co-founder and chairman of GLP, said: “This agreement is testament to how well GLP Japan Development Venture has performed since its inception 16 months ago. Our investment pipeline is considerably ahead of schedule and we are seeing strong demand for our developments, reflecting attractive fundamentals for modern logistics facilities in Japan.”
Schwartz also underlined the importance of the venture for its plans to grow its fund management platform. Over the past 12 months GLP has taken steps to exit large parts of its wholly-owned portfolio in Japan into investment vehicles which it manages with a view to recycling capital into growth markets. Late last year the firm exited almost half of its Japanese portfolio into a J-REIT in a transaction valued at approximately $2.6 billion.
The firm’s fund management platform’s assets under management now stand at $8.4 billion, more than half of the $14.46 billion of assets on its books in total.