Stonepeak has teamed up with Singapore-based builder Equalbase to develop logistics properties across Asia Pacific as the US infrastructure private equity firm ramps up its investments in the region.
A fund managed by Stonepeak is taking an equity stake in Equalbase and will form a joint venture with the developer through which the two companies plan to build logistics assets across Asia, according to an announcement on Monday.
The JV is in due diligence to acquire a Seoul project controlled by Equalbase’s sponsor as a seed asset for the platform, which will initially focus on South Korea and Malaysia, after having identified a pipeline of potential projects in the region.
“We believe the Asia Pacific region presents significant opportunities for investment in Grade A modern logistics assets as the market continues to exhibit favorable supply-demand dynamics and sustained structural tailwinds,” said Hajir Naghdy, Stonepeak’s senior managing director and head of Asia and the Middle East.
Car Shed Specialists
The joint venture partners expect their expansion in Korea and Malaysia to receive a boost from Equalbase’s track record of developing logistics properties in those countries, including build-to-suit warehouses for German carmakers Volkswagen and Mercedes-Benz.
In 2019, Equalbase completed development of the Mercedes-Benz Logistics Centre in Gyeonggi Province, Korea after finishing work on the Volkswagen RPDC Logistics Innovation Hub in Johor, Malaysia the year prior. The Volkswagen mega-warehouse spans 135,500 square metres (1.46 million square feet) in gross floor area across two floors.
A Stonepeak representative declined to provide details on the seed project in the greater Seoul area and other potential investments in the pipeline.
One of Equalbase’s ongoing projects in the Seoul area is a build-to-lease facility in Pyeongtaek city, around 80 kilometres (49.7 miles) from Seoul in southwestern Gyeonggi province. The project aims to build a five-storey warehouse with over 80,000 square metres of leasable space.
“We believe this joint venture will provide us with an extraordinary investment platform that will give us the opportunity to further grow and develop outstanding and sustainable assets for our clients,” said Christian Bischoff, founder and executive chairman of Equalbase.
In choosing the initial pair of target markets, the partners pointed to rapid growth in the logistics sectors in Korea and Malaysia. Stonepeak managing director Michael Chan cited a scarcity of shed builders and operators in the region as creating opportunities for the partners.
“Customers in Asia continue to face limited choices for specialist logistics developers and managers that can reliably serve their expanding logistics needs at scale, which we believe creates compelling opportunities for continued industry growth,” said Chan. “Equalbase has a proven track record of providing high quality, bespoke logistics solutions, as illustrated by their blue-chip customer base.”
Expanding APAC Footprint
The tie-up marks Stonepeak’s latest venture in Asia Pacific where it has committed over $3 billion in equity through platform investments and add-on acquisitions across Japan, Taiwan, Singapore, Indonesia, Australia and New Zealand.
Among its biggest investments in the region is Digital Edge, a $1 billion pan-Asia data centre platform it set up in September 2020. In the two years since its inception, Digital Edge has established projects in Japan, Korea, Indonesia and the Philippines.
The $51.7-billion fund manager also invested in the APAC cold storage business of Emergent Cold which provides temperature-controlled space across Australia, New Zealand and Southeast Asia, as well as in several renewable energy platforms in Taiwan and Japan
Last month, Stonepeak teamed up with a unit of Philippine power utility giant Meralco to acquire a portfolio of 2,180 telecom towers from local phone company Globe Telecom through a sale and leaseback deal valued at $472.2 million.