After launching its J-REIT in 2012, industrial real estate heavyweight GLP has formed its first open-ended logistics real estate income fund, PERE can exclusively reveal.
Launched at the end of 2019, GLP Japan Income Fund is currently the largest private open-ended logistics vehicle in the country, having reached ¥280 billion ($2.6 billion; €2.24 billion) in assets under management to date. It has the potential to grow up to $10 billion in AUM in the next several years, according to GLP. It has received commitments from both international and domestic investors such as pension funds, financial and insurance companies and sovereign wealth funds. GLP did not disclose the actual amount of equity raised.
The fund has been seeded with 11 newly developed, fully leased assets in Greater Tokyo and Osaka from GLP. The firm also has the ability to acquire assets from third parties on behalf of the fund.
Apart from the newly launched fund, GLP founded its logistics real estate investment trust in Japan as early as 2012 for core logistics products. The GLP J-REIT market cap has grown at a compound annual growth rate of 21 percent since 2014. It is understood that firm has divested close to $4 billion of assets to the REIT in the past five years. The annualized total return for GLP J-REIT stands at 17.1 percent, according to Bloomberg.
Ralf Wessel, managing director, fund management at the firm, said: “GLP is the largest logistics developer in Japan so our development program is pretty big. We felt having both a listed entity and an unlisted open-ended entity to acquire stabilized and high-quality, income-producing assets that allow us to focus on both sources of capital markets is a great thing.” He noted that there is a right of first look for the J-REIT to look at the assets from GLP’s balance sheet at the moment.
“Bear in mind, there will be moments that the non-listed market could be stronger than the listed market and vice versa. So, it’s possible that at times one will be more active in acquiring assets than the other,” said Wessel. “Today, we have over 50 investors and we want to make sure that we always have diverse investment opportunities for the global investment community.”
Japan is one of GLP’s core markets for development where the firm executes $1.6 billion of new development projects annually. It plans to start nearly $3 billion of new development projects in 2020, according to GLP. In 2018, GLP launched GLP Japan Development Partners III, the largest-ever Japan-focused logistics private real estate fund.