GIC makes first foray into Indonesia's logistics sector

An artist's impression of a logistics warehouse which will be part of a portfolio to be jointly developed by GIC and MMP in the next three years.
An artist's impression of a logistics warehouse which will be part of a portfolio to be jointly developed by GIC and MMP in the next three years. PHOTO: MMP

It ties up with MMP to develop warehouses over 3 years

Singapore sovereign wealth fund GIC has teamed up with Indonesia's PT Mega Manunggal Property (MMP) to develop a portfolio of quality logistics warehouses over the next three years.

The warehouses will boast nearly 500,000 sq m of net leasable area in both Greater Jakarta and Greater Surabaya in Indonesia, the two firms said in a joint press release issued yesterday.

The partnership aims to meet increasing demand by companies for sophisticated inventory systems which cannot be fulfilled by traditional warehouses, they added.

This is GIC's maiden investment in Indonesia's logistics sector.

"We are attracted by the long- term growth of this sector, which is underpinned by the strong consumption of Indonesia's rapidly rising middle class," GIC Real Estate's managing director and co-head of its Asia operations, Mr Loh Wai Keong, said. "We believe GIC's knowledge and experience investing in logistics, both in Asia as well as other global markets, will add value to this partnership."

MMP, a publicly listed company in Indonesia, develops, owns and operates logistics properties, with a focus on international quality warehousing. "The partnership will also focus on increasing productivity," MMP president director and chief executive Fernandus Chamsi said, adding that having good operations and quality human resources, as well as good corporate governance, helps.

Indonesia was ranked 54th in the World Bank's Logistics Performance Index of 2014. Restrictions on foreign investment in its logistics sector were recently loosened under President Joko Widodo as his administration aims for economic expansion and higher growth by 2019.

GIC has over US$100 billion (S$135.9 billion) in assets under management in the property, private equity, fixed income and equity sectors in over 40 countries. It has been investing in emerging markets for over two decades.

It has invested in Indonesia's retail sector, putting in about 5.2 trillion rupiah (S$537 million) in PT Trans Retail, which operates hypermarkets, supermarkets and cash- and-carry stores under the Carrefour and TranSmart brands.

A version of this article appeared in the print edition of The Straits Times on April 16, 2016, with the headline 'GIC makes first foray into Indonesia's logistics sector'. Print Edition | Subscribe