Tuesday, September 18, 2012

Property Group Sees Future in Japanese Freight and Logistics Investments

Emirates Cash Boosts Goodman Portfolio
Shipping News Feature

JAPAN – ABU DHABI - The Japanese arm of international property specialist Goodman has established the ‘Goodman Japan Development Partnership’ (GJDP) which is a 50/50 venture between Goodman and the Abu Dhabi Investment Council (Adic) with the avowed intent of developing a more extensive property portfolio to service the freight and logistics sector in the country.

A combined US$500 million of equity has been allocated to GJDP, with the Partnership allowing for an initial investment target in excess of US$1 billion. GJDP has contracted to acquire a prime development site in Ichikawa, Tokyo Bay on which will be constructed a 60,000 square metre modern logistics facility. The Ichikawa land acquisition, together with the previously announced land acquisitions in Osaka Bay and Tokyo Bay, means that GJDP launches with an initial investment in three super prime development projects with a planned total leasable area of 250,000 square metres and an estimated end value in excess of JPY55.5 billion (US$700 million).

Goodman says Ichikawa is widely considered one of the best locations in Japan by logistics operators and is strategically located a short distance from Tokyo's business district with easy access to Haneda Airport and Tokyo and Chiba seaports. The group plans to construct a 60,000 square metre modern, multi-tenant logistics and distribution centre with ramped access to all floors with an estimated completion value in excess of JPY17 billion (US$215 million).

Meanwhile the Goodman Japan Core Fund (GJCF) has closed its initial equity raising stage with three global institutional investors, increasing GJCF’s external equity commitments to over US$100 million. GJCF is a portfolio of nine completed logistics facilities and one parcel of development land located in prime logistics locations in and around Tokyo, Osaka and Fukuoka. GJCF’s investment strategy is intended to invest in Japanese logistics assets to deliver stable income driven returns with potential for income growth additionally, GJCF benefits from a first right of refusal over any on market investment acquisitions and developments completed by Goodman Japan or the newly established GJDP. Paul McGarry, CEO of Goodman Japan said:

“We have a focused strategy in Japan. We are focused on the very best locations where structural changes are leading to increased demand and supply remains constrained. The three new development projects enable us to deliver solutions tailored to meet the needs of our customers who are under continual cost pressures due to the structural changes occurring in the Japanese manufacturing, retailing and logistics sectors. The new developments will enable our customers to realise operating efficiencies and improved margins.”

Photo: An artist’s impression of the Ichikawa development.