Asia-focused logistics investor The Redwood Group has held a second close on its Japan fund at $237 million, with an additional $50 million commitment from a European public health retirement fund, PERE can reveal.
On the heels of that closing, Redwood has already sealed a $105 million deal for a development site in Sakura city, close to Narita International Airport in Tokyo, according to Stuart Gibson, chief executive of Redwood. The Sakura warehouse development will be a multi-tenant facility, and already has 20 percent of its leasing commitments from several Japanese companies, he added.
The development is planned as a 5-story, 915,000 square-foot warehouse, with a total berthing capacity for more than 40 trucks and incorporating the latest seismic and environmental standards. Targeted completion is for the second half of 2015.
Redwood declined to comment on fundraising, but it is understood that the Sakura deal has taken up all the committed funds of the Redwood Japan Logistics Fund, including the second close. It is also understood that the firm is in talks with three more investors about holding a third close sometime in January, and expects to hold a final close on $500 million in the first quarter of 2014.
Following the Sakura deal, Redwood has also closed several small separate account deals that it could not fit into the fund. They include a $20 million small, built-to-suit facility in Narita, and a $30 million development in Baraki, just 25 minutes from Tokyo’s central business district.
The Baraki deal involved two investors besides Redwood, and one of those investors also joined Redwood for the Narita deal. While Redwood declined to disclose the names of the investors, it is understood that CBRE was the one involved in both.
Both the Sakura and Narita deals are near the airport, in what Gibson calls a “stand-alone market.” Rents in that area are cheaper (about JPY98 per square foot as compared to JPY140 per square foot in Baraki), and it has good highway access. However, Gibson added that Redwood will wait until a property is about 60 percent pre-leased in that area before they start construction.
“Customer demand in Japan for modern logistics facilities remains strong, particularly for those well located with ease of access to major thoroughfares such as Sakura serving air freight, trucking distribution and e-commerce clients,” Gibson and managing director Hideaki Matsunami said in a Redwood statement.
Founded in 2006 by Gibson and Charles de Portes, who were previously in senior roles at ProLogis, Redwood also received a corporate investment from Equity International in August, meant to accelerate the expansion of its Asia platform. The firm is also raising a China fund, and has five projects under construction in the country.