German BVK adds logistics asset to Japanese portfolio

CBRE Global Investors and Universal-Investment have bought a new prime logistics property near Kobe in Japan on behalf of German pension fund Bayerische Versorgungskammer (BVK).

Image: CBRE Global Investors

Completed in September 2019, the 42,000 sq.m. asset is located along the Chugoku Express Highway near Kobe, a city about 35km west of Osaka.

The deal comes after CBRE GI and Universal sold the Midosuji Grand Tower in Osaka and acquired a portfolio of more than 1,000 residential units in the city on behalf of BVK in August last year.

“This asset will enhance the diversity of the client’s portfolio and reinforce income resilience against possible market corrections, backed by the increasing demand for the modern logistics facilities in this market,” said Tetsuya Fujita, managing director and head of Japan at CBRE Global Investors.

Designed with grade-A logistics specifications, the property is fully occupied by a well-established logistics company on a 10-year fixed-term lease. Financial details were not disclosed.

The company said revenues were supplemented by a solar panel farm that is guaranteed by a 20-year sales agreement with the regional utility company.

The Japanese logistics market faces a shortage of modern assets and the team at CBRE GI expects that growing demand will buoy existing property performance.

Other institutional investors, investment managers and logistics specialists are betting on the same market trends.

Hong Kong-based logistics real estate platform ESR raised US$630m for its ESR Japan Logistics fund 3 in May last year, funding new logistics developments across Greater Tokyo, Osaka and Nagoya.

In January last year, AXA Investment Managers – Real Assets, the property arm of the French insurer, and a sovereign wealth fund purchased a US$1bn logistics portfolio in Japan from ESR.

Additionally, warehouse investor and developer GLP launched the largest-ever Japan-focused logistics private real estate fund in December 2018, setting out to reach US$5.6bn once fully invested.

The GLP Japan Development Partners III fund was backed by several investors, including  the Canada Pension Plan Investment Board.

“The acquisition fits our portfolio strategy to increase the allocation to logistics and continue regional diversification,” added Jean-Antoine Robert, portfolio manager for CBRE GI.

“Japan offers attractive opportunities for European investors relative to other developed markets, driven in part by evolving local standards and user expectations that channel demand towards quality commercial and residential space.”

CBRE Global Investors is a global real asset investment management firm with US$112.9bn in assets under management.

BVK is Germany’s largest pension scheme group and has €77bn in AUM.

Headquartered in Frankfurt/Main, Universal-Investment has fund assets of about €510bn  under administration.

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