GLP’s Japan-focused REIT has sold a fully occupied warehouse northwest of Tokyo at a price 25 percent higher than the asset’s appraised value, as investors seeking stable cash flow and low-risk returns continue to bet on Japan’s logistics sector.
Located in Fukaya, a city in the Saitama Prefecture, the asset sold for JPY 4.1 billion ($30.4 million), GLP J-REIT said in a statement last week. The REIT picked up the property for JPY 2.38 billion in January 2013 and expects to gain JPY 1.9 billion on the sale. The difference between the sale price and the asset’s JPY 3.3 billion appraised value reflects “the robust demand for logistics real estate,” according to the statement.
Built in 1991, the property dubbed GLP Fukaya spans 19,292 square metres (207,654 square feet) of gross floor area and is occupied by trucking services provider Hitachi Collabonext Transport System Co. The fully air-conditioned warehouse includes a lounge and features a ceiling height of 6.1 to 6.7 metres with an ample column span.
The property is located at 1900-2, Mizugahara, Orinokuchi, close to Saikai Kaido (National Route 140) and about 8.9 kilometres (5.5 miles) from the Hanazono Interchange on the Kan-Etsu Expressway, offering convenient access to Tokyo and surrounding areas. The Tokyo Stock Exchange-listed REIT did not disclose the identity of the buyer.
GLP J-REIT, which is managed by GLP Japan Advisors, targets modern logistics facilities throughout Japan. The trust has scooped up a total of JPY 838.6 billion ($6.3 billion) in assets across the country, amassing a portfolio of 89 properties that is currently 98.8 percent occupied by 176 tenants.
Safe Haven in Japanese Sheds
The sale comes towards the close of a successful year for Japan’s logistics real estate sector, which continues to attract investors due to its relative stability and the country’s healthy e-commerce growth and ultra-low interest rates.
Speaking at MTD TV’s Japan logistics investment panel in May, Yosuke Fujioka, head of investments and fund management for Japan at GLP, noted that there is “healthy absorption” of supply in the market this year as the rise of online shopping bolsters warehouse demand.
GLP in January announced the final closing of its flagship Japan logistics development fund with JPY 412 billion ($3.7 billion) in total commitments, marking the largest-ever private vehicle targeting real estate in the country. The company is also betting on Japan’s data centre market, with plans to invest more than JPY 1.5 trillion ($12 billion) in developing server farms during the next five years, GLP announced in February.
LaSalle Eyes Warehouse Buy
During the same week that GLP announced its Fukaya sale, LaSalle Logiport REIT, LaSalle Investment Management’s Tokyo-listed trust, purchased a stake in four recently built Japanese logistics properties totalling 43,471 square metres (467,922 square feet) in gross floor area.
The REIT announced last week that it would acquire an 11 percent equity interest in a silent partnership that owns the properties for the price of JPY 180 million ($1.3 million).
Through the deal, LaSalle Logiport REIT will acquire long-term preferential negotiating rights for the purchase of the assets. The REIT “will consider the acquisition of the Subject Property at an appropriate timing based on capital market conditions as well as the occupancy status of the Subject Property,” it noted in the statement.
All the properties are fully occupied by one tenant each and are managed by CBRE. The properties include a 13,702 square metre (147,471 square foot) warehouse in Aisai, a city in Aichi Prefecture west of Nagoya, which was completed in July of last year; and a 3,701 square metre (39,840 square foot) property in Saitama within Saitama Prefecture that was finished in February of this year.
Also part of the deal are two properties that were completed last month near Nagoya in Aichi Prefecture: a 20,981 square metre (225,838 square foot) asset in Kariya city; and a 5,089 square metre (54,773 square foot) warehouse in Inuyama city.