ITOCHU Corporation and Mapletree Establish Joint Venture to Develop Build-to-Suit Logistics Facilities in Japan
December 7, 2009
ITOCHU Corporation (“ITOCHU”) and Mapletree Investments Pte. Ltd. (headquartered in Singapore)*1 on December 4 agreed to form a joint venture to undertake primarily Build-to-Suit development projects for strong logistics tenants in Japan.
Outline of the Joint Venture MOU
|Investment target assets||BTS (build-to-suit)-type*2 logistics facilities in metropolitan areas and major regional cities in Japan|
|Scale of target investment||50 billion yen (planned)|
|Establishment timing||End of January 2010|
Since 2004, ITOCHU has set up and managed private placement funds specializing in logistics (aggregate total assets operated: approximately 50 billion yen). While our competitors have focused their operations on normal temperature (dry), multiple-type logistics centers in harbor areas, our fund’s greatest feature is that we have succeeded in establishing a business model centered on development and ownership of inland, multi-temperature zone (dry, chilled, frozen) BTS-type logistics centers, based on the requirements of our business customers.
Japan’s real estate market remains stagnant, hit by the downturn in the financial market since last autumn’s so-called Lehman Shock, and the challenging climate for new investments in logistics facilities is expected to continue for some time. On the other hand, in the logistics and transportation,market to respond to the sophistication of logistics services and cost-reduction there is strong demand for consolidation of logistics bases and for facilities with optimal specifications.
Under such market conditions, by establishing this fund and investing ahead of others, ITOCHU, optimizing its functions as a general trading firm, will respond to customer needs (development of new facilities, and liquidation in existing facilities), an important factor in funds specializing in logistics facilities. The fund will target further expansion of this business by combining accumulated knowhow for development, ownership and management of logistics facilities, while providing ITOCHU’s real estate information and network, which links [trade flows] and [logistics flows].
Mapletree has been actively involved in real estate investment in Asia and is the main sponsor of Mapletree Logistics Trust (MLT)*3 whose REIT trades on the Singapore Stock Exchange. Its investment in Japanese logistics facilities began in 2007, in collaboration with ITOCHU, and has progressed steadily since then. ITOCHU places a great deal of confidence in Mapletree’s fund raising capacity and fund management capabilities. The completed assets under this joint venture will be offered to MLT on a right of first refusal basis.
Since the conclusion of a memorandum of understanding (MOU) for a strategic alliance with Mapletree in October 2005, ITOCHU has built its relationship with the company as a strategic partner through the supply of property, human resources exchange and in other areas. ITOCHU and Mapletree have now agreed to begin studying cooperative approaches, not only in the area of logistics facilities, but in other fields such as industrial, retail, and commercial real estate facilities in Japan and other Asian regions, and on December 4, 2009 renewed and re-concluded the MOU for strategic alliance.
- About Mapletree
・Established in December 18, 2000
・Owned 100% by Temasek Holdings Ltd. (a Singapore government-owned investment company)
・Facilities and assets held by PSA were hived off from the real estate division of PSA Singapore and transferred to Mapletree.
- BTS (built-to-suit)-type logistics facility
・A dedicated logistics facility specially developed for a specific tenant based on the location and building specifications required by the operator (tenant)
- About MLT
・Listed as a REIT on the Singapore Exchange since July 2005
・Countries subject to investment include Singapore, Hong Kong, Japan, South Korea, China, Malaysia, Vietnam
・Current combined assets: approximately 190 billion yen (of which, approximately 38 billion yen within Japan)