SINGAPORE (THE BUSINESS TIMES) - Mapletree Investments has entered the Kyushu logistics market by acquiring a prime land plot spanning a whopping 116,319 square metres (sq m) or nearly 1.3 million square feet (sq ft).
In a statement on Tuesday (Nov 24), Mapletree said it will develop two blocks of Grade A four-storey, double ramp-way logistics facilities on the site. They will have a combined gross floor area of 231,648 sq m or about 2.5 million sq ft.
While it did not disclose the acquisition price for the land, Mapletree said the total investment for the development will be over $550 million.
This is set to be the largest warehouse space in Kyushu upon completion, according to the privately owned property giant, which manages four Singapore-listed real estate investment trusts and five private-equity real estate funds.
Construction of the first warehouse will be completed in early 2023, while the second warehouse is slated to open by spring 2024.
The sprawling site is located in Chikushino city of Fukuoka prefecture on Japan's Kyushu island, and is well-connected to major transportation infrastructure.
Wong Mun Hoong, Mapletree's regional chief executive officer for Australia and North Asia, said that Fukuoka is one of the regions in Japan "where the group has a high conviction for modern logistics facilities".
He noted that Fukuoka is considered the economic, administrative and cultural centre of the Kyushu region, attracting companies from different industries to locate their branches within the city or in the vicinity.
Home to Japan's youngest population, the city is fast expanding and counts as one of the country's key industrial hubs, especially for the logistics, high technology and automobile manufacturing sectors, Mapletree said.
Meanwhile, a report released on Tuesday by the Urban Land Institute (ULI) and PwC noted that logistics properties have become an overwhelming investor favourite. It is the only major property asset class whose fundamentals have improved as a result of the pandemic, due in part to soaring demand from e-commerce retailers.
The structural undersupply of logistics facilities also means that demand should remain strong, although investors worry the growth in online sales may peak and that industry pricing dynamics may outrun the market, according to the ULI-PwC report.
And specifically in Japan, logistics assets, along with multifamily residential properties, are now the major asset classes driving the local real estate market, the report stated.