CPPIB, Caisse to invest in Singapore, Indonesia warehouses, commit $300m

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Canada Pension Plan Investment Board (CPPIB) has partnered with Ivanhoe Cambridge, the real-estate arm of pension fund manager Caisse de depot et placement du Quebec, to invest in warehouses in Singapore and Indonesia. Both funds have agreed to work with real estate logistics operator LOGOS, in their quest to “develop and acquire modern logistics properties” in the two countries.

CPPIB said that it will initially commit S$200 million ($142 million) for an about 48 percent stake in LOGOS Singapore Logistics Venture. The investment will see CPPIB taking control of two fully leased existing multi-storey logistics warehouse facilities as well as one development opportunity, all of which, the company claimed, to be “very well located in established industrial submarkets of Singapore”.

CPPIB will also commit $100 million for a stake of about 48 percent in LOGOS Indonesia Logistics Venture. The Indonesia’s operation will develop assets to meet the increasing demand for modern logistics facilities on the back of the country’s rapid e-commerce growth and an expanding logistics sector.

“The logistics sector in Southeast Asia continues to grow as a result of the burgeoning middle class and the rise of e-commerce, and presents an excellent opportunity for a long-term investor like CPPIB,” said Jimmy Phua, Managing Director, Head of Real Estate Investments – Asia, CPPIB.

“We are looking forward to making our first direct real estate investments in Singapore and Indonesia through well-established, like-minded partners like LOGOS and Ivanhoé Cambridge.”

CPPIB and Ivanhoé Cambridge will be equal partners in both joint ventures, with LOGOS, which operates in Australia, China, Indonesia and Singapore, holding the remaining stake in the ventures.

CPPIB is tasked to pay current benefits on behalf of 19 million contributors and beneficiaries. It has invested in public equities, private equities, real estate, infrastructure and fixed-income instruments. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, São Paulo and Sydney, CPPIB is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. As of December 31, 2016, the CPP Fund totalled C$298.1 billion.

Private equity firms and institutional investors are watching Asia’s warehousing and logistics sector closely. Billions of dollars are currently being poured into the sector in recent years, following a boom in demand from e-commerce in the region.

Reuters reported last month that Warburg Pincus, Blackstone Group LP and Hopu Investments were among bidders short-listed to present a potential offer for Singapore-listed Global Logistic Properties.

In January, Warburg Pincus-backed warehouse operator e-Shang Redwood agreed to buy an 80 percent indirect stake in the manager of Singapore-listed Cambridge Industrial Trust (CIT).

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