Singapore SWF To Acquire Japanese Logistics Assets From Blackstone For $800 Million

Singapore sovereign wealth fund GIC announced on Friday (April 28) that it would purchase a portfolio of six logistics assets in Japan from Blackstone Inc for more than US$800 million, indicating a strong appetite for logistics real estate.

According to Refinitiv data, the transaction, which includes 4 million square feet of warehouse space spread across Japan, is the largest real estate transaction in Japan this year in terms of value.

"It is a good addition to our Japan portfolio as we continue to focus on tailwind sectors such as hospitality and logistics," Goh Chin Kiong, GIC's real estate business's deputy chief investment officer, said in a statement.

GIC, a long-term investor in Japan, has recently increased its deal activity as the country's interest rates remain low. It purchased hotel and leisure assets from Japanese railway and hotel conglomerate Seibu Holdings last year.

While the global real estate market has been impacted by rising borrowing costs, the logistics sector has remained relatively unscathed.

"Blackstone has reshuffled its (real estate) portfolio over the decade," said Daisuke Kitta, head of Blackstone's real estate business in Japan, shifting its focus away from traditional assets like offices and towards logistics, data centres, and hotels.

"Despite the real estate market downturn, we have secured solid returns through the latest transaction." It demonstrates the importance of asset selection," he explained.

Blackstone is selling the logistics assets it purchased from Daiwa House Industry Co. about two years ago. According to Blackstone, net operating income for the assets has increased by 35% under its management.

The US firm announced this month that it had raised $30.4 billion for its latest global real estate fund as it looks to expand its presence in the industry. It currently manages US$332 billion in investor capital.