APG, Canada Pension Plan Investment Board (CPP) and ESR have entered into a strategic agreement to establish a new development joint venture with a total equity allocation of US$1 billion. The joint venture will invest in and develop industrial and warehouse logistics portfolio in the Seoul and Busan metropolitan areas, the two markets with the largest populations and highest consumer spending in South Korea.
The investment and development of a logistical warehouse in Bucheon, completed in 2018, is an example of an earlier collaboration. It is now used by tenants like Samsung, Chanel and Sisley.
Graeme Torre, Head of Real Estate, APG Asset Management Asia said: “Following the success of our first joint venture with ESR and CPP Investments in Korean logistics, we are delighted to be able to repeat the partnership. This will allow us to capture the next wave of growth and opportunity in a sector that even in these uncertain times, is demonstrating resilience. Throughout our global portfolio we look for investment opportunities that allow us to meet the long term return and sustainability objectives of our pension fund clients. With like-minded partners such as CPP Investments and the local execution expertise of ESR, this new venture is perfectly placed to do just that."APG, CPP Investments and ESR have agreed to initial investments in the joint venture in the amounts of US$350 million, US$450 million and US$200 million, respectively. The partners have allocation expansion options that could bring the total equity investment capacity to as much as US$2 billion over time.
APG provides Dutch pension funds ABP, SPW and ppf APG exposure to these Korean logistics real estate
investments.
Read the press release here.