PGGM IM commits up to the JPY equivalent amount of EUR 100 million on behalf of its PGGM Private Real Estate Fund , and Redwood commits an additional USD 50 million of equity, together representing over 1/3 of the maximum RJLF target size of USD 500 million.
PGGM IM expects to benefit from the RJLF’s strategy of investing in distribution, logistics and warehousing real estate facilities in selected high-demand, in-fill locations of the largest metropolitan areas of Japan tied to globalization and trade. This investment by PGGM (IM) aims to “develop to hold” in institutional Grade A distribution, logistics and warehousing real estate facilities.
PGGM (IM) notices that the strong demand for efficient industrial space in Japan is being generated by the relative under-supply of Class-A facilities (less than 10% of total warehousing stock nationally), as well as the effort by many companies to reconfigure supply chains to reduce costs and meet safety and crisis-recovery requirements.
This strong fundamental demand, most prevalent in high-density port and multi-modal sub-markets of the major cities, is enhanced by both the expansion of third-party logistics and e-commerce sectors as well as Japan’s increased trade with China and Southeast Asia. Together these dynamics provide an ongoing opportunity to contribute to the modernization of Japan’s warehousing and in improving the real estate tied most closely to the efficiency of the logistics supply chain.
PGGM IM sees that this Japan investment by Redwood will be driven primarily by customer demand for modern logistics facilities with top seismic and environmental specifications and the high through-put efficiency required by today’s leading domestic and international logistics operators, retailers and manufacturers.
PGGM IM will leverage on Redwood Japan team's market knowledge and Japan development experience along with Redwood Asia's international building standards and strong global and regional client relationships. In PGGM IM’s opinion, the Redwood Japan’ team has identified a significant pipeline of prime location development projects in the major metropolitan markets of Japan.
Guido Verhoef, Head of Private Real Estate at PGGM IM, says it is an attractive investment: ,,This investment fits well into the PGGM Private Real Estate Fund with its long term investment policy. Our objective is to diversify our investments across different property types in respect to Japan. The ‘develop to hold’ strategy provides us with exposure to a state-of-the-art high quality portfolio of income generating logistics assets.’’
,,We are pleased to continue to partner with the experienced and decisive manager The Redwood Group, which is also a partner of ours in China logistics. The Redwood Group Japan team has executed some of the highest quality distribution and logistics real estate developments and investments in Japan and elsewhere in Asia. PGGM is also pleased with Equity International’s selection of Redwood as best in class platform for logistics in Asia.”
PGGM is a cooperative pension fund service provider. PGGM offers its institutional clients pension fund management, comprehensive asset management, policy advice and management support. PGGM currently manages approximately EUR 140 billion in pension assets on behalf of five pension funds representing some 2.5 million people. As a cooperative with roughly 578.000 members, PGGM is helping to achieve a valuable future. PGGM is working both on its own and with strategic partners to develop innovative future provisions by linking together pensions, care, housing and work. More information can be found at www.pggm.nl.