Singapore GIC Makes First Investment in Indonesia’s Logistics Sector
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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.
Questions & Answers
Q.What is the primary goal of the new partnership between GIC and MMP?
What is the primary goal of the new partnership between GIC and MMP?
The partnership aims to develop a portfolio of quality logistics warehouses over the next three years. This initiative seeks to meet the increasing demand from companies for sophisticated inventory systems.
Q.What areas in Indonesia will see the development of these new logistics warehouses?
What areas in Indonesia will see the development of these new logistics warehouses?
The new logistics warehouses, offering nearly 500,000 sq m of net leasable area, will be developed in both Greater Jakarta and Greater Surabaya in Indonesia, as stated by the firms.
Q.Why is GIC making this investment in Indonesia’s logistics sector now?
Why is GIC making this investment in Indonesia’s logistics sector now?
GIC is attracted by the long-term growth of the sector, which is underpinned by the strong consumption of Indonesia’s rapidly rising middle class. Restrictions on foreign investment were also recently loosened.
Q.Has GIC invested in other sectors in Indonesia previously?
Has GIC invested in other sectors in Indonesia previously?
Yes, GIC has previously invested in Indonesia’s retail sector. It put in about 5.2 trillion rupiah into PT Trans Retail, which operates various hypermarkets, supermarkets, and cash-and-carry stores.