GLP, CIC Buy Japanese Logistics Facilties for $1.6 Billion

Singapore-based Global Logistic Properties and China Investment Corp. will buy 15 logistics facilities in Japan from LaSalle Investment Management for $1.6 billion.

The facilities total roughly 2.5 million square feet, with more than 90 percent of the space within the Greater Tokyo and Osaka areas. The deal reflects the rebound in Japanese manufacturing and distribution after the March earthquake and tsunami.

The 50-50 joint venture between GLP, a listed subsidiary of the Government of Singapore Investment Corp., and CIC, an investment fund affiliated with the Chinese government, is expected to be completed in early 2012. Each company will initially invest $272.9 million in the venture, the first of its kind between GLP and CIC.

“Demand in Japan continues to come from companies working to become more competitive and are focused on ensuring they have more efficient warehouses,” said GLP CEO Ming Z Mei. “Companies are also rethinking how their supply chains are managed so they can minimize any risk of disruption in the future.”

He said 67 percent of the properties are leased to large third-party logistics providers and e-commerce companies use 13 percent of the facilities.

“After this acquisition, our Japan portfolio will grow approximately 30 percent to 3.6 million square meters, making our footprint almost 40 percent larger than our next largest competitor,” Ming said.

GLP and the Canada Pension Investment Board in September announced the creation of a $500 million joint venture to develop logistics facilities in Japan.

Contact Hisane Masaki at yiu45535@nifty.com.