Canada Pension Plan Investment Board and leading Asia-Pacific focused logistics real estate specialists LOGOS announced this week the creation of a new Indonesia venture for the development of modern logistics facilities in Greater Jakarta.
CPP Investments will invest $200m into the JV, which will develop a diversified portfolio of facilities targeted at third party logistics (3PL), data centre and industrial tenants.
Explaining the rationale behind the launch of the new venture, Jimmy Phua, Managing Director and Head of Real Estate Investments, Asia, CPP Investments said, “One of the key investment themes for CPP Investments has been Asia’s growing middle class and domestic consumption. The growth in Indonesia’s e-commerce market has driven the demand for modern logistics facilities.”
According to research from consulting firm, Bain & Company, the e-commerce sector in Indonesia is set to be worth $124bn by 2025. Indonesia’s geography, spread across numerous islands, creates significant challenges for the delivery of good, so investment in modern logistics and warehousing facilities is seen as key in the growth of the e-commerce sector.
This is the second joint venture between CPP Investments and LOGOS in Indonesia, with the first launched in 2017 in partnership with another international investor. This earlier partnership includes more than 637,000 sq m of modern logistics space across four properties including Metrolink Logistics Hub, Cikarang Logistics Park, Cibitung Logistics Hub and Cileungsi Distribution Centre.
In December 2020 LOGOS announced that it had secured a loan of $120m from the IFC, a member of the World Bank Group, for the further modernisation and transformation of the Cikarang and Citibung facilities into “green” logistics hubs.
LOGOS has identified a pipeline of opportunities for this new venture and will look to make a number of acquisitions over the next 12 months.
Stephen Hawkins, LOGOS’ Managing Director said, “We are very pleased to be working with a long-standing partner in CPP Investments to meet this demand and, through both ventures, deliver up to US$1 billion of high-quality logistics facilities to this market over the coming years.”
LOGOS’ Asia Pacific portfolio currently includes 100 logistics estates across eight countries with AUM of approximately $10.2bn. As well as Indonesia the company owns and manages operations in Australia, China, Singapore, Malaysia, Vietnam, India and New Zealand.