AMB Property Corporation has announced the formation of AMB Japan Fund I, L.P., a yen-denominated fund that will invest in distribution facilities near high volume airports, highway systems and seaports in Japan's major metropolitan areas.
Thirteen institutional investors have committed 49.5 billion yen (US$446 million) for an 80% equity interest in the Fund. When combined with AMB's co-investment of 20% and a targeted leverage ratio of 75%, the Fund is expected to have investment capacity of approximately 247 billion yen (US$2.23 billion).
Hamid R. Moghadam, AMB's chairman and CEO said, "We expanded our operating platform to Japan in 2003 and have built the local development, acquisition and operating infrastructure to provide global customers with highly functional and well-located distribution facilities. The significant size and investor quality of AMB Japan Fund I reflects the opportunities we see to support customers' needs for modern logistics space in Japan's largest distribution markets."
The Fund's investment focus is to purchase stabilized industrial distribution properties, including those developed by AMB with its Tokyo-based partner, AMB BlackPine. At closing, the Fund owned six distribution facilities in Tokyo comprising approximately 915,400 square feet (85,040 m²) that had previously been acquired by AMB. AMB's current development pipeline in Japan includes an additional 2.5 million square feet (230,000 m²) in Tokyo and Osaka that is expected to be contributed to the Fund upon stabilization.
John T. Roberts, Jr., president of AMB Capital Partners, commented, "The co-investment model is an excellent vehicle for private capital investors looking to build a quality industrial portfolio with a proven partner. Working with a global operator like AMB, investors gain access to a series of benefits, including alignment of interests with a recognized market leader and efficient access to quality real estate investments and customers in target markets."
AMB will be compensated for asset and portfolio management services, will earn fees on future third-party acquisitions, and receive potential incentive distributions at the end of the Fund's eight year term. The Fund will be managed from AMB's Asian headquarters in Singapore.