Fortress Investment Group LLC, which has $41.7 billion of assets under management, said there are investment opportunities in the Japanese real estate market because some banks may sell properties as loans come due.

“A fair portion” of $50 billion worth of real estate will have to be sold in the next three to five years as loans backed by those properties come due, according to Mr Pulley the Managing Director of Fortress. Some Japanese banks may have to sell properties that were used as collateral as real estate values in Japan fall about 30 percent to 40 percent.

Total commercial mortgage debt in Japan this year will reach a record high 1.12 trillion yen ($14 billion), a 59 percent increase from last year, according to an estimate by Moody’s Investors Service.

Source: Bloomberg (edited by Bear Logi)

Mitsui Fudosan Residential acquired a former food warehouse in Toyosu, Koto-ku, Tokyo. The seller was Simplex Investment Advisors, a Goldman Sachs and Aetos Capital affiliate. Mitsui has not revealed its plans for the property. The property has six stories above ground and 10,347 m2 of total floor space.

Source: Nikkei

On 21 Oct., Yamato Holdings decided the beginning of package delivery and fare collection business in Hong Kong.

Starting 31 Oct., the airport will resume regular international flights for the first time in 32 years, and new international terminal building as well as Tokyo International Air Cargo Terminal (TIACT) opened on 21 Oct. Haneda will be handling the second largest volume of air cargo as a Japanese airport.

Full view of TICAT opened on 21 Oct. 2010

This cargo terminal is large as it has site area of about 170,000m2 and about 80,000m2 of total floor area.

Ihe terminal comprises two international cargo buildings, fresh food building and two office buildings. The 1st international cargo building is a shed managed by TIACT and the second building is leased by carrier and air freight forwarders such as ANA, Nippon Express, Kintetsu World Express and Yusen Logistics.

Source: Japan Logistics Field Institute

On 15 October 2010, a Kintetsu Express (KWE)’s warehouse was delivered to its new subsidiary established at Shanghai Pudong total bonded area in May 2010. 

This newly established subsidiary has its own warehouse at Shanghai Pudong total bonded area adjacent to Shanghai Pudong airport, the largest hub for international air cargo in China. It handles export and import air freight, goods storage in bonded warehouse, added-value type logistics processing service and delivery. Aiming at opening in January 2011, it goes preparing for a new warehouse facility with the state of the art storage equipment in order to correspond to all kinds of customers’ needs for storage of goods from large cargos like production equipment and transportation machine to precise electric parts like semiconductor, chemical products requiring temperature control and medical products.

Source: KWE

In October 2006, Biccamera opened Higashi-Matsuyama Center in Higashi-Matsuyama City of Saitama Prefecture and operates logistics business for Kanto region. In February 2010 it acquired 100% ownership of Sofmap and that made more integrated operation possible. Therefore, Biccamera is going to fundamentally streamline logistics system of the entire group.

From November 2010, Higashi-Matsuyama Center (Saitama) which is Biccamera’s total logistics base  will become a base for merchandise delivery operation and temporary storage of large goods of Biccamera and Sofmap. Urayasu Center (Chiba) which is total logistics center for Sofmap and has a good access to each store will become a base for merchandise delivery operation to each store and provision of work and repair business. Makuhari Center, which now provides work and repairs for Biccamera and Sofmap, will be closed.

Currently, in Osaka Biccamera group has three logistics bases for Kansai region. However, these will be closed and Kobe Center will be newly established, which is a new total logistics hub for Kansai region and will cover not only Kansai region but also Aichi and Okayama prefectures.

Consolidation of logistics bases will make possible the followings: sharp reduction of distribution cost, shortening of merchandise delivery time to stores and customers, and reduction of stock by sharing stock between Biccamera and Sofmap.

Starting day of operation: 1 November 2010

Overview of new logistics center

Name: Kobe Center

Address: 2-1 Nadahama-cho, Nada-ku, Kobe-shi, Hyogo

Area to be used: 9,334m2

Source: Biccamera

Kuehne + Nagel Group a global logistics company expanded its business volumes, taking advantage of the favourable economic environment for the logistics industry.

The operational result (EBITDA) of CHF 271 million in the third quarter marked a record in the company’s history.

l Compared with the first nine months of last year turnover rose by 18.6 per cent 

l EBITDA increased by 7.5 per cent (adjusted by 12.0 per cent) to CHF 746 million.

l Net earnings improved by 16.0 per cent (adjusted by 20.2 per cent) to CHF 449 million.

Seafreight
* During the first nine months of 2010　maintained high-level container volume with a 17 per cent increase.

* Growth in the global sea freight market, however, softened in the third quarter.

Airfreight
* Increased airfreight tonnage by 29 per cent in the first nine months.

* Growth in the international airfreight market had slowed in the middle of the year.

* Increase volumes and market share, especially in Asia.

Road & Rail Logistics
* First three quarters of the year, European overland activities registered a growth in net turnover of 9.5 per cent.

Contract Logistics
* Net turnover remained at the previous year’s level.

* EBITDA decreased in the first nine months by 13.2 per cent partly due to currency adjustments (6.6 per cent) and start-up costs for new businesses.

Source: Kuehne + Nagel

Mapletree Logistics Trust Management Ltd. (MLTM), as Manager of Mapletree Logistics Trust (MapletreeLog) is pleased to announce that it has signed a sale and purchase agreement to acquire Toki Logistics Centre, a warehouse facility in Japan, for JPY 1.05 billion (approximately S$16.2 million) from Hamakyorex Co., Ltd, a reputable third-party logistics company in Japan.

The industrial property is a two-storey warehouse facility strategically situated in Toki Plasma Research Park, an industrial and logistics park about 40 km from Nagoya (Japan’s third largest city after Tokyo and Osaka). Well-connected by the Tokai-Kanjo Expressway to various areas such as Shinetsu, Tokai, Hokuriku and Kansai areas and centrally located between Tokyo and Osaka, the area is popular for logistics and industrial facilities.

This acquisition provides an attractive and accretive yield of 8.6% which is comparatively higher than the implied property yield of the existing Japan portfolio which is at about 5.5%.

With the addition of this acquisition, MapletreeLog’s total portfolio will increase to 92 properties and the book value of the asset portfolio would be approximately $3.4 billion upon completion of this transaction. The acquisition is expected to be completed by 4Q 2010.

- Purchase Price: JPY 1.05 billion (Approx. S$ 16.2 million)

- Land tenure: Freehold

- Land area: ~ 26,000 sqm

- GFA: ~ 16,000 sqm

- Vendor/Lessee: Hamakyorex Co., Ltd, a leading Japanese 3PL company listed on Tokyo Stock Exchange

- Lease terms: 10 years ending 31 Oct 2020

- Outgoings: Property Tax and Capex will be borne by landlord; Maintenance costs will be borne by the customer

Source: Mapletree Logistics Trust (edited by Bear Logi)

Daisyo a Japanese food conglomerate has recently purchased a piece of land in Adachi Tokyo for construction of a new food distribution center.

Land acquisition details

(1) Date of Contract:    March 31, 2010

(2) Date of delivery:     September 29, 2010

(3) Location:               6-2-5 Iriya, Adachi-ku, Tokyo

(4) Area:                     9,901.51 square meters (2,995.21 tsubo)

(5) Building Plan Outline

Building Use: Office and Warehouse

Building size: approximately 4,000 square meters (tentative)

Source: Daisyo

Singapore wealth fund GIC's logistics property unit GLP surged nearly 11 percent on its debut on Monday and is set to raise S$3.9 billion ($3.01 billion) in its IPO.

GLP, which owns industrial and logistics real estate in China and Japan, is the first listing of a firm majority-owned by the Government of Singapore Investment Corp (GIC), one of the world's biggest sovereign wealth funds with assets of more than $200 billion.

Source: Reuters (edited by Bear Logi)

On 15 October 2010, Kawasaki City started to look for enterprises which would forge ahead to about 9.9 ha in Higashi-Ogijima Total Logistics Base Area.

The application period is from 15 October to 17 December 2010. The plat for application is Higashi-Ogijima 4A area (21,444.00m2 from 88, Higashi-Ogijima, Kawasaki-ward), 4B area (16,870.98m2 from 88, Higashi-Ogijima, Kawasaki-ward）, 4C area (16,871.05m2 from 88, Higashi-Ogijima, Kawasaki-ward）, 5A area （17,509.93m2 from 86, Higashi-Ogijima, Kawasaki-ward）, 5B area (17,509.94m2 from 86, Higashi-Ogijima, Kawasaki-ward）、6 area (9,093.53m2 from 90, Higashi-Ogijima, Kawasaki-ward）.

Leasing condition for these area is term leasehold interest for business and leasing period is 20 years.

For detailed information, please refer to http://www.city.kawasaki.jp/e-news/info3241/file2.pdf (in Japanese)

Point of Contact:
Kawasaki City
Management Planning Section, Port Management Department, Port Bureau
TEL：+81-(0)44-200-3047
58keiki@city.kawasaki.jp

J-REP Co., Ltd (“J-REP”) a Japanese industrial real estate group has announced that it intends to acquire all the common shares of the company in a move to delist from the Mothers section of the Tokyo Stock Exchange.

J-REP will become a wholly owned subsidiary of Macquarie Goodman Japan Pte. Ltd a joint venture between Macquarie and Goodman.

J-REP will participate as an investor in a new logistics real estate development fund to be established by Macquarie and Goodman known as ‘Japan Logistics Development Framekwork’ (JLDF)

On a successful delisting of the company, J-REP will be renamed ‘Goodman Japan’.

For more details refer to the company press release here

Source: J-REP (edited by Bear Logi)

ProLogis a leading global provider of distribution facilities, announced it has signed third-quarter lease agreements with two customers in Japan, totaling 84,000 square feet (7,800 square meters).

A wholesaler in the food industry, which will occupy 61,000 square feet (5,700 square meters) at ProLogis Parc Ichikawa I, bringing the five-story, 1.3-million-square-foot (125,200-square-meter) distribution facility to approximately 93 percent leased. ProLogis Parc Ichikawa I supports distribution to the greater Tokyo and Chiba regions.

A Japanese trading company, will occupy 23,000 square feet (2,100 square meters) of previously unleased space at ProLogis Parc Narita III, located in the town of Shibayama in the Chiba Prefecture of Japan. Comprising 570,000 square feet (53,000 square meters), the distribution facility is approximately 40 miles (64 kilometers) northeast of Tokyo and is adjacent to the Narita International Airport.

Source: Prologis (edited by Bear Logi)

Private equity firm Blackstone Group which has real estate assets of about $24 bln at end June is near a deal to buy a portfolio of 180 properties from ProLogis  for about $1 billion USD.

The deal involves more than 20 million square feet of warehouse property across the United States.

ProLogis has been working for years to pare a debt load taken on during an aggressive boom-time expansion. In July, credit ratings agency Fitch Ratings stripped ProLogis of its investment-grade rating, partly because it was not clear how the company would raise money to pay down debt.

Source: Reuters (edited by Bear Logi)

Global Logistic Properties Ltd. is set to raise S$3.45 billion ($2.64 billion) in Singapore’s biggest initial public offering.

Shares in GLP, the overseas logistics unit of Government of Singapore Investment Corp., were priced at S$1.96 a share, the top end of a range marketed to investors.

Mapletree Industrial Trust, owned by a unit of Temasek Holdings Pte, plans to raise as much as S$940 million in an IPO next week.

Global Logistic, which said last month it would offer 1.76 billion shares, plans to use S$1.5 billion of the proceeds to expand in China and Japan, and about S$600 million to pay down existing shareholder loans. There is an over-allotment option to expand the sale by 234.7 million shares.

Source: Bloomberg (edited by Bear Logi)

Global Logistic Properties (GLP) may consider spinning off a real estate investment trust (Reit) to monetise its assets, particularly completed properties in Japan.

The major logistic player in Japan and China has launched a $3.9 billion IPO this week.

GLP will also start looking at a private development fund in Japan with institutional investors next year to acquire land, develop the plots and lease them, which is expected to open another avenue of stable fee income for GLP.

GLP's Japan business, where fair-value loss on investment properties sank the group into the red for the fiscal year ended March 31, is deemed as the less attractive part of the business compared to its China exposure.

Despite Japan's dismal GDP numbers, GLP was still enjoying a compounded annual growth rate of 42.9 per cent in gross floor area in the last five years.

Analysts felt that though the Japan business is flattening out, it is a cash cow providing stable cashflows that can be deployed to fund GLP's expansion in China.

GLP's entire development pipeline of 7.9 million sq m is in China, and negotiations to secure more land is still ongoing. China is expected to become a more significant part of GLP's business in the long term and over the next three to five years, half of GLP's earnings will come from China, up from the current 15 per cent share.

Source: Singapore Business Times (edited by Bear Logi)

Bear Logi is to exhibit at property forum MIPIM Asia in Hong Kong from November 10th to 12th. Bear Logi will hold seminars on how to invest in Japan Property as well as discuss why industrial real estate continues to attract investors in Japan and China.

MIPIM Asia focuses exclusively on facilitating real estate transactions and investment in the Asia Pacific markets. Join the key players for three days of networking, prospecting and promoting at the region’s top property event.

MIPIM Asia 2009 key figures

l 1,927 participants

l 1,021 companies

l 384 investors, end users, hotel groups and retailers

l 146 exhibiting companies

l 42 countries

Source: MIPIM

* BOJ move likely to accelerate property market recovery

* BOJ's asset-buying could fuel REIT sector M&A

* Tokyo Stock Exchange's REIT index jumps to 5-month high

Mitsubishi Estate and other Japanese property stocks jumped on Wednesday as investors bet the central bank's surprise plan to buy assets including real estate investment trusts would help spur on the industry's recovery.

Further consolidation in the country's 3 trillion yen ($36 billion) REIT market is also expected if the Bank of Japan pours money into selective REITs with financial stability.

REITs, corporations that pool investor funds to buy real estate, have lost about two-thirds of their value since peaking in May 2007 as the global credit crunch made it harder for them to raise funds to purchase properties for growth.

But the Bank of Japan's plan to set up a 5 trillion yen ($60 billion) fund to buy a wide range of assets including REITs, along with cutting benchmark interest rates to virtually zero, has brought "extremely positive" support to Japanese REITs, said Daisuke Seki, CEO of IB Research and Consulting, a REIT consultancy.

"REITs are seeing an increasingly positive business environment because fund-raising is becoming easier and now, investors are assured that the government will be pumping money into the (REIT) market," he said.

Seki said the BOJ's move could also accelerate mergers and acquisitions in the country's REIT market if the central bank is seen targeting mainly REITs with bigger assets or better financial health.

Shares of Mitsubishi Estate surged 4.2 percent, and the real estate sector's subindex also rose 4.2 percent.

Among REITs, Nippon Building Fund Inc gained 5.2 percent, Japan Real Estate Investment jumped 6.4 percent and Japan Prime Realty Investment Corp rose 1.2 percent.

That helped the Tokyo Stock Exchange's 36-member REIT index rise 1.2 percent to its highest close since May 6.

Through the Bank of Japan's 5 trillion yen fund announced on Tuesday, the central bank plans to allocate about 3.5 trillion yen to buy government debt and treasury bills, and the remainder to purchase other assets.

BROADER IMPACT

To counter a tighter lending environment and falling property prices, Japanese REITs last year began actively pursuing mergers and acquisitions as weaker players seek partners for survival.

The industry consolidation, along with greater willingness among banks to offer loans, has helped REITs improve their financial health and buy properties in the past year.

Japanese REITs had acquired properties worth a total 366 billion yen in the six months to June, more than double the figure a year ago, with more transactions expected towards the end of this year, according to a Barclays Capital report.

The BOJ's latest move is also likely to support Japan's property market as a whole, said SMBC Friend Securities Research Centre analyst Masao Bamba.

"It's not that the government will directly buy properties, but the fact that they will pump money into the REITs and help maintain their cash status means that property transactions in general will be activated. REITs are key vehicles in property transactions," said Bamba.

"The news came also when the (property) market was heading for a recovery with easier access to banks' lending. It's positive for the overall property market," he said.

Betting on a recovery in Japan's property market, investors from the United States to Singapore are already on the hunt for real estate in Japan with over $2 billion in deals cemented since late last year and more in the offering.

Source: Reuters

On 6 October 2010, Aeon, a large Japanese retailer announced in their quarterly report that they would stream-line logistics and consolidate product lines.

According to Aeon they will make gains by more effectively using group infrastructure in the procurement of goods and back-office services. Each of group companies has proceeded to reform profit structures such as cost reduction by consolidation of demand for goods and streamlining of logistics.

Aeon will also open a new logistics base in Tsingtao, China to contribute to the improvement of its earning capacity by streamlining store operations in China.

Source: Aeon

Agility has appointed Steve Whittingham as the new managing director for Korea and Japan.

This appointment comes as the global logistics provider looks to strengthen its management team in those growing markets.

He will be based in Agility's Seoul office.

Source: Agility

DHL has appointed Roger Crook to the role of CEO at DHL Express for the Asia Pacific, Eastern Europe and Middle East regions, which will take effect 1 January 2011.

In his new role, he will work on sharpening the company's focus on international cross border shipping business in the APEM region by targeting MNCs and SMEs.

Source: DHL

LaSalle Investment management Inc. announced that the fund it manages has decided to acquire an in-service logistics facility in Tokyo bay area.

LaSalle has made a decision to acquire this property following 3 of those in Tokyo bay are which had been acquired in June 2010. It will expand the investment in large high functional logistics facilities by managing of “LaSalle Japan Logistics Fund II” and have a plan to invest about 150 billion yen (US$ 1.8 billion) in a coming year and half.

Mr. Yosuke Yoshikawa, operating officer in charge of logistics department from LaSalle Investment Management Inc., says “this logistic facility we acquired has approximately 17,000m2 of total floor area and located close to central Tokyo, and we see this as a stable target of investment. By consolidating logistics hubs for the enterprises and anticipating brisk demand for large high functional logistics facilities corresponding to cost reduction, LaSalle will continue to acquire in a proactive manner logistics facility which has a good location and land for development in Tokyo metropolitan area and Kansai region and provide in a long term reasonable facilities.”

LaSalle Japan Logistics Fund I and II:

The fund specialized in logistics which invests in Japanese logistics properties with fund raised from institutional investors, major pension funds, university funds, investment governments in USA, Europe, Middle East, Asia region. The portfolio is about 200 billion yen (US$ 2.4 billion) and this fund is related to “Tokyo Bay Area Logistics Facilities Portfolio”(S&LB), “Nippon Express Ichikawa Shiohama Center” (BTS), “Logiport Kashiwa”(multi-tenant), “Logiport Osaka” (multi-tenant), “Hamura Logistics Center” (BTS), “Sumitomo Chemical Logistics Shiino-mori Logistics Center”(BTS), “Logiport Nagareyama”(multi-tenant).

Point of Contact:

Mr. Imaizumi, PR section, LaSalle Investment Management Inc.

Tel：+81-(0)3-5532-8921

Source: LaSalle Investment Management Inc.

AMB Property Corporation, a global industrial real estate company, announced it has leased 283,200 square feet (26,310 square meters) of its China development portfolio.

China's gross domestic product is forecast to rise 9.5 per cent in 2010, accelerating from 9.1 per cent in 2009.

The forecast represents the government's official view of the country's economic outlook.

China's economy rose 11.9 per cent in the first quarter and 10.3 per cent in the second quarter of this year.

China's purchasing manager index for September showed a strong revival in economic activities, soothing concerns about a double-dip in the Chinese economy.

Source: Reuters

The Government of Singapore Investment Corporation (GIC) is set to raise about$3.2 billion by listing its logistics unit Global Logistic Properties (GLP) on the Singapore Exchange.

The initial public offering (IPO), to be launched next month, will comprise almost 1.8 billion shares priced between $1.78 and $1.96 each.

About $1.5 billion from the IPO proceeds will go towards supporting GLP's growth plans in China and Japan.

"We expect that the supply and demand fundamentals for modern logistics facilities in China and Japan will remain favourable, especially around key logistics hubs and major cities, where most of our properties are located," said GLP in its prospectus.

It also expected its Japan portfolio to provide a stable source of cash to finance its expansion in fast-growing China.

The Japan portfolio had enjoyed an average lease ratio of 98.7 per cent for the three months ended June 30. For a copy of the prospectus please visit our research page www.bearlogi.jp/en/research.asp

Redwood Group, the manager of about $1 billion of real-estate assets, plans to raise as much as $600 million for a fund that will invest in warehouses in greater Tokyo as it bets on rising trade between Japan and China.

The company aims to raise $400 million to $600 million by June 2011 from investors including pension funds and endowments globally, said Chief Executive Officer Stuart Gibson. The loan- to-value ratio of the fund, slated to start in October, will be about 55 percent to 60 percent, enabling Singapore-based Redwood to buy as much as $1.3 billion of properties, he said.

Redwood will compete against rivals including GIC Real Estate, the property investment company of the Government of Singapore Investment Corp., and AMB Property Corp., the world’s second-largest warehouse owner, which are investing in Japanese storage facilities as trade between China and Japan surged 35 percent to a record high.

“There is a dearth of new product coming to the market in the next two quarters,” Gibson said in an interview in Tokyo on Sept. 1. “We will be targeting assets and locations in the Tokyo Bay and its surrounding port area.”

Gibson, a former president of ProLogis Japan, founded Redwood in 2006 with Charles de Portes. Gibson and de Portes also were joint-venture partners in Tokyo for San Francisco- based AMB in 2002 to 2006. Denver-based ProLogis is the world’s biggest warehouse owner.

China-Japan Trade

Total trade value between China and Japan surged 35 percent to $138.3 billion in the six months ended June 30 from a year earlier, according to the Japan External Trade Organization. It was a record for the semiannual period and is expected to reach a record high this year, it said.

A surge in demand for investment-grade warehouses at a time when no new supply of space for such facilities is available makes it an attractive investment, Gibson said. The firm plans to allocate about 75 percent to 80 percent to greater Tokyo while the rest it plans to invest in major cities west of Tokyo including Osaka, Kobe and Nagoya, he said.

About 40 percent of the fund’s capital will go toward building warehouses and the rest will be used to buy existing facilities that are in operation, Gibson said. The fund will have a target annual return of 15 percent, he said.

Redwood identifies investment-grade warehouses as facilities with ramps that allow trucks to be driven to each floor, have high ceilings, and floors that can withstand at least 1.5 tons per square meters, he said.

“We think the occupancy is moving to the right direction and justifies the timing of re-entry into the logistics real estate business,” Gibson said.

Source: Bloomberg (edited by Bear Logi)