This article was published on Feb. 24, 2025, at 3:48 p.m. on the ChosunBiz MoneyMove site.
IGIS Asset Management is promoting the sale of a logistics center in Japan acquired through a global fund. D&D Platform REIT, which holds revenue securities of the logistics center, is also participating in the sale process. D&D Platform REIT is managing its financial structure by securing funds needed for new asset inclusion through a capital increase; however, its borrowing fund is set to mature soon, necessitating additional liquidity.
According to investment banking (IB) industry sources on the 24th, IGIS Asset Management and D&D Platform REIT are in the process of selling a 60,000 pyeong (approximately 198,000 square meters) Japanese temperature-controlled logistics center. Global asset management company Nuveen Real Estate, under the Teachers Insurance and Annuity Association of America (TIAA), is also participating in this sale process. IGIS Asset Management and Nuveen Real Estate jointly own the logistics center through a Japanese joint venture (JV).
IGIS Asset Management and Nuveen Real Estate acquired the logistics center by establishing a joint venture in Japan. At that time, the acquisition price was 48 billion yen (approximately 45 billion won), and the book value at the end of last year was 54.1 billion yen (51.6 billion won). D&D Platform REIT purchased a 37% equity stake in the revenue securities of IGIS Asset Management's global fund (IGIS Global No. 300) for about 53 billion won in 2021. Considering the increased valuation and the exchange gains due to the appreciation of the yen, substantial profits are expected.
Industry sources expect that the sale of the logistics center will proceed smoothly, as Amazon.com Japan, the world's largest online retailer, is using the entire logistics center as a single tenant. Amazon.com Japan has signed a lease agreement for the logistics center until 2033, leading to stable future cash flow. Last year's rental growth rate reached 13.6%. D&D Platform REIT received about 7.2 billion won in dividends last year.
It is anticipated that D&D Platform REIT will use the funds recovered from the sale of the logistics center to improve its financial structure. This is largely due to the potential increase in interest expenses during the refinancing process of the loan related to the office in Mullae-dong, which is maturing in May. D&D Platform REIT received collateralized loans of 354.7 billion won for senior debt and 174.5 billion won for mid-priority debt when acquiring the prime office building Young City (currently Semicolon Mullae) in Mullae-dong in 2020. At that time, the interest rate was around 2.7%, and there is a high likelihood that loan rates will rise significantly in the current refinancing process.