Allianz has finalized a US$ 100 million (JPY 11 billion) investment into Redwood Japan Logistics Fund II ("RJLF2"), a develop-to-core Japan-focused, closed-ended, JPY-denominated logistics fund managed by E-Shang Redwood ("ESR").
RJLF2's strategy is to develop modern institutional-grade logistics and distribution properties in tier-1 locations in Japan and provide an exit option upon the stabilization of the assets. Allianz Real Estate undertook this transaction on behalf of 3 Allianz companies, the Group's first investment into logistics in Japan.
"Japan is experiencing on-going modernisation of supply chains with strong demand for efficient logistics facilities," said Rushabh Desai, Chief Executive Officer of Allianz Real Estate Asia-Pacific. "This combined with an attractive yield gap, and relatively low development risks provide compelling reasons for Allianz to consider the Japanese logistics sector as a part of a balanced portfolio, together with ESR which is one of the most active logistics players in the region.
ESR's RJLF2 has over US$400 million in commitments to date with capacity to attract further commitments. In addition, ESR has secured approximately US$600 million of co-investment commitments dedicated to investment alongside RJLF2 projects, bringing the total fund's purchasing power to over US$1 billion of equity and over US$2 billion on a leveraged basis to fund its current and near-term development pipeline. ESR's RJL2 is a follow-on fund to RJLF1 which deployed all the capital it raised in 2014, over US$300 million, ahead of schedule on prime logistics development projects in Tokyo, Osaka and Nagoya.
Charles de Portes, President of ESR stated: "We are excited to partner with Allianz, one of the world's leading institutional investors, on our most prime development projects in Japan."
Stuart Gibson, co-CEO of ESR and Head of Japan, added: "The lack of well-located class A space with high throughput efficiency in which ESR specializes continues to provide tremendous opportunities for deployment of sizeable investment capital with returns amongst the most profitable of real estate products nationally. We look forward to a long-term and strategic relationship with Allianz for investment in the region."
Allianz already has significant investments in the logistics sector in China and Australia, as well as right across Europe through its investments in various funds and JV partnerships.
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