The Canada Pension Plan Investment Board (CPPIB) is reinvesting $235 million in US dollars into the launch of the largest private open-ended logistics fund in Japan.
The pension fund, Canada’s largest, first partnered with global real estate investment manager GLP in 2011, the CPPIB said Friday. At the time, the partners established the Japan Development Fund—a 50-50 joint venture to build large scale warehouses in the greater Osaka and greater Tokyo regions. CPPIB invested US$250 million of equity into that first venture over a three-year span.
The CPPIB has authorized several more ventures since then. In 2016, it launched a second development fund in Japan. Last month, the pension plan exited the first development fund with US$451.7 million of net proceeds, or nearly double its original investment.
It is now recommitting funds into the launch of the GLP Japan Income Fund, which was established with US$2.6 billion. The fund includes six LEED Gold and Platinum certified projects, which are certified green developments.
“We are pleased to continue our strategic relationship with GLP, one of our key global real estate partners, while recycling capital for other compelling investment opportunities,” Jimmy Phua, managing director and head of Asian real estate investments at CPPIB, said in a statement.
Logistics investments have attracted investors who are looking for more stable real estate income during the pandemic. Industrial real estate investment trusts, which consist of mainly warehouses, have jumped 27% thus far in 2020, according to data from the National Association of Real Estate Investment Trusts, or Nareit.
In Japan, revamped multi-tenant warehouses are being developed partly to attract female workers. This comes amid a labor shortage in the distribution industry, as workers have steered clear of facilities that were considered dangerous, according to local news reports.
“The strong fundamentals in the Japanese logistics market continue to make this a compelling investment opportunity for long-term investors,” Phua said.
GLP has about US$89 billion in assets under management for operations in Brazil, China, Europe, India, and the US, in addition to Japan.