Ivanhoe Cambridge, the real estate subsidiary of Canada’s second-largest pension fund, has teamed up with Hong Kong-based alternative investment management group PAG to launch a new Japan logistics venture with a $400m investment capacity.
In a joint statement, the two firms said the new platform will develop and acquire for longer-term hold core logistics facilities, particularly in urban and last-mile locations.
The venture has already identified a pipeline of opportunities for its investment programme, according to the announcement.
It will be governed by an investment committee composed of Ivanhoé Cambridge, as majority shareholder in the venture, and PAG, which will operationally manage the venture.
PAG has been investing in Japanese real estate since 1997 and the JV will not be the first partnership between the two firms as they have started with the first investment in 2017.
“This partnership continues the roll-out of our global conviction for logistics, and in that global context, these chosen target cities in Japan are attractive as they are highly urbanized, have low vacancies, and there is significant room to grow in their e-commerce penetration rates,” said George Agethen, Senior Vice-president Asia-Pacific at Ivanhoé Cambridge.
Demand for logistics facilities, which remains in an expansionary mode, in Japan continues to be driven by e-commerce. PAG and Ivanhoe said the venture will take advantage of these strong fundamentals and address third-party logistic tenants’ increasing demand for high-quality space in greater Tokyo and Osaka.
Ivanhoe Cambridge is the real estate subsidiary of Canadian pension fund Caisse de Depot et Placement du Quebec. It held C$64 billion in real estate assets as of December 21, 2019, and has interests in more than 1,000 buildings, primarily in the industrial and logistics, office, residential, and retail sectors.
Last year, Ivanhoe Cambridge teamed up with Australian logistics real estate developer LOGOS Group to acquire a strategic development site in Melbourne.
PAG, on the other hand, is one of the world’s largest Asia-focused private investment firms. It started more than two decades ago across three core businesses, namely PE, real estate, and absolute returns, which are helmed by its three founders.