GIC to buy Japan logistics assets from Blackstone for $800 million

By Makiko Yamazaki and Ritsuko Shimizu

TOKYO (Reuters) -Singapore sovereign wealth fund GIC said on Friday it would buy a portfolio of six logistics assets in Japan for more than $800 million from Blackstone (NYSE:) Inc, reflecting strong appetite for logistics real estate.

The transaction, comprising 4 million square feet of warehouses located across Japan, is the largest real estate deal in Japan this year in terms of value, according to data compiled by Refinitiv.

“It is a good addition to our Japan portfolio as we continue to focus in tailwind sectors such as hospitality and logistics,” Goh Chin Kiong, deputy chief investment officer for GIC’s real estate business, said in a statement.

GIC, an investor in Japan for over three decades, has recently notched up its deal activity as the country’s interest rates remain low. Last year, it bought hotel and leisure assets from Japanese railway and hotel conglomerate Seibu Holdings.

While the real estate market globally has come under pressure due to soaring borrowing costs, the logistics segment remains relatively unscathed.

    “Blackstone has reshuffled its (real estate) portfolio over the decade,” shifting its focus to logistics, data centres and hotels away from traditional assets like offices, said Daisuke Kitta, the head of Blackstone’s real estate business in Japan.

    “We’ve secured solid returns through the latest deal despite the real estate market downturn. It shows that it’s important to be selective about assets,” he told Reuters.

Blackstone is selling the logistics assets it bought about two years ago from Daiwa House Industry Co. Net operating income for the assets, a key gauge for profitability, has risen 35% under its management, Blackstone said.

The U.S. firm said this month it had raised $30.4 billion for its latest global real estate fund as it looks to double down on the industry. It currently has $332 billion of investor capital under management.