Singapore – Mapletree Investments Pte Ltd (Mapletree) is delighted to announce that it has formed a strategic alliance with Japan’s Itochu Corporation to collaborate in logistics and industrial real estate projects in Asia for mutual benefit.
Mr Hiew Yoon Khong, CEO of Mapletree, said: “We view this alliance as yet another significant strategic milestone. For us to be a leading Asian real estate entity, it is not enough to bank just on our knowledge in real estate, finance and deal structuring, and on our ability to spot and time market opportunities.”
“We also need to augment our skills in these areas with strategic tie-ups such as the one with Itochu, to broaden our business networking to source and secure the best deals possible, and to match investors to creatively structured real estate investment products. Our alliance with Itochu allows the both of us to use our collective skills, knowledge and experience in all these areas to our mutual benefit,” Mr Hiew added.
Japan presents a potentially huge market for Mapletree’s logistics and industrial businesses. This alliance with Itochu enables Mapletree to jump start its market penetration in Japan and at the same time gain access to Japanese investors who may be interested in investing in its various funds. In addition, this alliance will provide Mapletree access to Japanese logistics operators who are already operating across Asia and are growing rapidly.
Brief description of Itochu
Itochu is a leading Japanese trading conglomerate with global reach. Its seven divisions comprise:
- Finance, realty, insurance and logistics
- Textile
- Machinery
- Aerospace, electronics & multimedia
- Energy, metals and minerals
- Chemicals, forest products & general merchandise
- Food distribution
Itochu’s logistics arm provides domestic and international logistics support both internally to its six other divisions and externally as a third party logistics (3PL) service provider to its broad-based network of clients from 80 countries globally, including retailers, pharmaceutical and food manufacturers, convenience and large-scale department stores. Although many of its customers are Japanese, its client base also includes international players operating in the seven fields of its business.
Areas of cooperation & benefit
The collaboration with Itochu fits in with Mapletree’s two-pronged growth strategy for its industrial and logistics initiatives in Asia: growth in the near term through direct acquisitions and in the medium term through potential pipelines from development projects.
Direct acquisitions
More Japanese companies, including Itochu, are adopting an asset light strategy; they want to divest their brick-and-mortar assets in order to raise capital to fund their business expansion. Mapletree will be able to harness this growing trend with the help of Itochu, by gaining access to this pool of Japanese vendors to propel the growth of Mapletree Logistics Trust (MapletreeLog) and its industrial fund. As a start, MapletreeLog is exploring the potential of acquiring an Itochu-owned logistics facility in Tokyo and the acquisition of other Japanese assets facilitated by Itochu. With their network and reach into the Japanese corporate world, Itochu will also be able to facilitate deals with Japanese logistics clients operating elsewhere in Asia.
Development
There are other spin-off opportunities which the alliance can also take advantage of. The alliance will dovetail the expansion plans of these Japanese vendors – whenever feasible – by being their strategic real estate partner. The ability of the alliance to provide a one-stop, integrated real estate solution should stand the partnership in good stead.
As part of the one-stop convenience to Itochu’s clients, Mapletree can develop build-to-suit (BTS) and other ready-built industrial and logistics facilities with Itochu as a partner. The partnership will cooperate in the development, management, marketing and leasing of such facilities. When the facilities become income generating, they will create medium term pipelines for Mapletree’s logistics and industrial initiatives.
In Vietnam, the alliance is assessing the feasibility of developing BTS and ready built warehouses in Mapletree’s exclusive logistics park in the Vietnam-Singapore Industrial Park I and II. Mapletree is also in active negotiations in similar collaborative deals in China and Japan.
Real estate fund management
Mapletree and Itochu are both keen to expand their real estate fund management business. The alliance allows for the cross fertilization of skills and market knowledge, to further sharpen Mapletree’s ability to structure and manage the listed and unlisted funds. Mapletree is currently managing listed REIT, MapletreeLog through its wholly owned subsidiary, Mapletree Logistics Trust Management Ltd. and is in the process of building a portfolio of industrial assets across Asia. Itochu currently has a closed-end logistics investment fund and is exploring launching phase two of the fund in the near future. Itochu also has several other residential real estate funds under management.
