Singapore sovereign fund, GIC, is set to acquire a portfolio of six warehouses in Japan from private equity firm Blackstone for over US$800m, as Blackstone continues to divest assets after a decline in real estate earnings.
The six modern warehouses, developed by Daiwa House Industry, have a combined area of four million square feet and represent one of Japan’s most significant logistics portfolio transactions. The facilities are spread across the country in regional logistics hubs with convenient transport access via major roads and expressways. The sale of the warehouses comes as Blackstone’s real estate business has seen a 58% YoY fall in earnings for Q1 2023, with a market slowdown reducing income from asset sales and disposals.
GIC’s acquisition of the warehouses allows the $690bn sovereign fund to expand its exposure to logistics assets further. In Q1 2023, GIC dominated Asia Pacific’s outbound real estate investment, closing two blockbuster deals, including teaming up with Oak Street to acquire US-based Store Capital commercial and industrial trust for $14bn and working with Toronto-listed Dream Industrial REIT to buy out Canada’s Summit Industrial Income REIT in a deal valued at $4.4bn.
GIC has a diverse portfolio of investments across various industries and asset classes, including real estate. As a long-term investor, GIC has taken significant stakes in multiple companies, including CapitaLand and Mapletree, Singaporean real estate investment trusts (REITs). In addition to its stake in CapitaLand and Mapletree, GIC has also invested in several other companies across the globe, including Equinix, UBS, and Vanguard. GIC’s investment strategy focuses on high-quality assets and long-term growth, acquiring the six Japanese warehouses an attractive addition to its existing portfolio.
Daisuke Kitta, Japan’s head of real estate at Blackstone, has been instrumental in the private equity giant’s success in the logistics sector. Kitta joined Blackstone in 2008 and was part of the team that led the acquisition of Logicor, a European logistics firm, for $13.8 billion in 2017. This was Europe’s largest real estate deal and significantly boosted Blackstone’s logistics portfolio.
Under Kitta’s leadership, Blackstone has become one of the largest global investors in logistics real estate. Logistics is one of the private equity firm’s highest conviction investment themes, making up more than 40% of its global real estate portfolio, according to Kitta.
Blackstone has been selling some of its real estate assets lately, as the market slowdown reduced the group’s income from asset sales and disposals by more than half compared to 2022 levels. However, the firm is still confident in the logistics sector’s continued growth and is actively investing in logistics assets worldwide.
Kitta said the recent sale of six warehouses in Japan to GIC for over $800 million reflected Blackstone’s commitment to delivering for investors in any environment by focusing on the right sectors. The deal represents one of the most significant logistics portfolio transactions ever reported in Japan and highlights the potential for growth in the logistics sector.