GLP to Raise Japan’s Largest Real Estate Fund Amid Warehouse Boom

GLP, Asia’s largest logistics investor, has launched what it hopes will become a record-breaking $ 9 billion real estate fund in Japan as pandemic e-commerce boom sparks space rush ‘warehouse.

The large fund seeks to take advantage of the fact that much of Japan’s logistics infrastructure has yet to be modernized and is now increasingly vulnerable to labor shortages as part of the rise relentless online retailing.

GLP said on Tuesday it had raised 311 billion yen ($ 2.7 billion) from sovereign wealth funds, pension funds and insurance companies for the largest private real estate fund ever to focus on Japan.

Known as Japan Development Partners IV, the fund is expected to have over 1 billion yen in assets under management by the time of full deployment.

The fundraiser comes as many Japanese cities recently emerged from months of emergency as the shopping habits of many people changed dramatically.

“Japan is the fourth largest e-commerce market. And the pandemic has contributed to the growth of e-commerce. So it’s a very strong tailwind, ”said Yoshiyuki Chosa, president of GLP Japan.

The rise of online retail has exposed some of the flaws in Japan’s sometimes archaic logistics operations. Japanese warehousing infrastructure and logistics operations are often managed on a relatively small scale or are managed by large manufacturers for their own exclusive use.

The Japanese logistics market, Chosa said, had historically been plagued by an excess of middlemen, resulting in high costs and lower margins. Meanwhile, there was a need for greater competitiveness in the supply chain, propelled in part by the shrinking workforce and aging population in Japan.

“So there is a lot of room to grow,” he said, adding that the fund would target large-scale real estate assets in Japan and was likely to deploy an initial $ 4 billion in less than four years. years.

Research published last year by Jones Lang LaSalle showed that while overall volumes of real estate transactions in Japan fell in the first nine months of 2020, logistics investments have increased.

Large global logistics companies have recently spotted the growing gap between the demands of e-commerce in Japan and the lack of the kind of advanced automated logistics centers that are needed to make it work properly.

Last November, DHL Express announced that it had invested 9.9 billion yen in its biggest investment in a facility in Japan: a 21,000 square meter distribution center outside Osaka.

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