A sovereign wealth fund and an Asia Pacific real estate developer have teamed with AXA Investment Managers' real assets division to create a Japanese logistics business.
The joint venture is being established through the purchase of six logistics assets in Japan for more than ¥100 billion ($1.29 billion).
AXA IM - Real Assets is partnering with Asia Pacific real estate developer ESR and an undisclosed sovereign wealth fund to manage the logistics business.
The group will seek further investment and development opportunities across Japan's gateways cities, using commitments from the existing investors while over time considering raising new capital from new investors.
It will target large, high-quality modern logistics facilities, which have the ability to deliver secure income returns over the long term. The joint venture believes demand is expected to remain strong due to tight supply and supportive structural growth drivers, most notably in e-commerce.
The portfolio comprises about 38,000 square metres, including five assets in Greater Tokyo and one within Greater Osaka. The assets are on average over 95% leased with strong interest in the remaining space, the group said.
All of the assets are newly constructed within the past three years and are located in proven logistics hubs which are able to serve the last mile delivery needs of both cities.
The transaction expands AXA IM - Real Assets' €2 billion ($3.2 billion) global logistics portfolio into Japan for the first time.
AXA IM - Real Assets head of Asia Pacific, Laurent Jacquemin, said: "Internet retailing continues to grow in Japan but the level of penetration is low compared to many other global markets, underpinning our confidence that building a portfolio of well-located modern logistics assets will allow us to deliver secure income returns over the long term for our clients."