Warehousing capital

The real estate arm of the Government of Singapore Investment Corporation (GIC) has committed $600 million (€481 million) to the Pro-Logis Japan Properties Fund II, an exclusive joint-venture between GIC and Aurora, Colorado-based ProLogis. The GIC contribution represents 80 percent of the fund's total value.

The fund, which will invest in newly developed and acquired warehouse and logistics properties in Japan, plans to focus on facilities in Tokyo, Osaka, Kobe and Nagoya.

ProLogis, which also operates a real estate investment trust focused on worldwide logistics property, owns and manages more than 2,079 facilities in North America, Europe and Asia.

In addition to the GIC capital, the Japan fund will also receive equity and secured debt from ProLogis, bringing its total capitalization to around $3 billion. The fund will have $4.3 billion in buying power, when combined with $1.3 billion from the duo's first joint-venture.

ProLogis and GIC worked together on the debut ProLogis Japan Properties Fund, which closed in June 2002. ProLogis will retain a 20 percent ownership stake in the new venture and will continue to manage the fund.

In a statement, Jeffrey Schwartz, the chief executive officer at Pro-Logis, said the funds' investment provide space to large Japanese logistics operators like Nippon Express, Yamato Logistics, Senko and Hitachi Transport, as well as multi-national corporations like DHL, UPS, Sony and Bridgestone. ProLogis is the largest provider of distribution space in Japan.

In a statement, Dr. Seek Ngee Huat, president of GIC's real estate division, explained the appeal of a follow-up venture, saying the JV “is a good fit with our investments and return objectives in Asia.”

GIC has been stepping up its real estate investing in recent months, adding Sydney's Chifley Tower and Plaza to trophy properties like Chicago's AT&T Corporate Center, Seoul's Finance Center and Tokyo's Shiodome City Center. In total, the investor reportedly has a portfolio of 140 investments across more than 40 countries.

In a rare interview last summer, Seek told The Business Times of Singapore that GICwould be expanding its exposure to different types of real estate assets as the space becomes increasingly competitive. He also said GIC would be looking at emerging markets for opportunities.