Singapore’s GIC Adds Two More Daiwa-Built Sheds to Japanese Portfolio

Singapore’s GIC Adds Two More Daiwa-Built Sheds to Japanese Portfolio

GIC bought DPL Yatomi logistics facility in July for $100 million. (Source: Daiwa House)

GIC has acquired a pair of Japanese logistics facilities from Daiwa House Industry for an undisclosed sum, marking the eighth and ninth industrial assets that the Singapore sovereign wealth fund has purchased from the developer in its home market this year.

On Monday, GIC announced its purchase of a newly built logistics facility in Greater Osaka and a two-year-old facility in Greater Fukuoka, both located southwest of Tokyo and within key regional logistics hubs with access to major roads and expressways.

“This latest acquisition reflects GIC’s continued commitment to Japan and the logistics sector with trends such as e-commerce and supply chain optimisation supporting demand,” the fund said in a release. “Both properties have modern building specifications that cater to a wide range of tenants.”

The assets add to seven other Daiwa House-built warehouses bought by GIC this year, including its $800 million purchase of a portfolio of six properties from Blackstone in April and the $100 million the institution spent acquiring a modern facility in Yatomi city in July.

Rents Steady

The first asset is situated in the city of Takatsuki in the northeastern part of Osaka prefecture, and the second facility is further south in Greater Fukuoka’s Tosu city and was completed in 2021.

GIC chief executive Lim Chow Kiat (Getty Images)

GIC chief executive Lim Chow Kiat (Getty Images)

An influx of newly built properties has pushed vacancy higher in both markets, with 5.9 percent of the space in large multi-tenant logistics facilities across Greater Fukuoka remaining unleased in the third quarter, in a jump from just 0.9 percent in the preceding three months, according to CBRE data.

Rents, however, remained stable after inching up by less than 1 percent to JPY 3,440 ($23.45) per tsubo per month, or $7.1 per square metre in the third quarter, compared with the prior three-month period. With consumer goods companies providing most of the new shed demand in Greater Fukuoka, CBRE said it expects rents in Tosu to continue rising steadily despite the sudden spike in vacancy.

In Greater Osaka, vacancy at big logistics facilities grew to 4.5 percent in the third quarter from 3.2 percent in the previous quarter, pulling down effective rents by  0.2 percent to JPY 4,110 per tsubo ($28), or $8.5 per square metre during the same period.

A GIC representative declined to disclose further details regarding the transaction or the assets, while Daiwa House had not responded to media queries by the time of publication.

Spotlight on Japanese Sheds

With $770 billion in assets under management, GIC is among the investment heavyweights expanding their industrial holdings in Japan.

Last month, an unnamed Asian institutional investor provided fresh capital for ESR Japan Logistics Fund III (RJLF3), a JPY 150 billion vehicle which focuses on development of large scale logistics properties in Japan. The cash commitment, which is understood to have brought the fund to a final close, is being used to fund the second phase of ESR’s $2.5-billion Higashi Ogishima Distribution Centre project near Tokyo.

That commitment was soon followed by Singapore-based SC Zeus Data Centers announcing a 50-megawatt data centre project in Osaka, as the operator aims to build a 200MW portfolio in the country.

Mitsui, Hankyu Hanshin in Singapore

As foreign players flock to the Land of the Rising Sun, Japanese investors have also been expanding their logistics bets around major markets in Asia.

In a joint statement with Singapore’s Boustead Real Estate Fund, Japan’s Mitsui & Co and the development arm of Osaka-based conglomerate Hankyu Hanshin said they have formed a joint venture to redevelop an industrial facility near Tuas Port in the Lion City.

The Singapore-Japan JV aims to rebuild 36 Tuas Road into a five-storey multi-tenanted logistics hub spanning 643,680 square feet, with the project expected to be completed in the first half of 2025.

“The redeveloped property is envisaged to meet the needs of logistics and manufacturing players in the region who require a high-specification logistics facility… (catering) to contemporary supply chain and manufacturing operations,” the partners said in the statement.

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