Ares Management closes US$4bn Japan logistics fund, its largest to date

Ares Management has raised ¥612 billion (US$4 billion) for its fifth Japan logistics development fund, the unit's largest closed-end institutional fundraise. The fund, Japan Logistics Development Partners V LP, closed at its hard cap and is nearly 50 per cent larger than its 2021 predecessor.

Ares Management, a US-based investment firm, said on Tuesday its real estate arm has raised ¥612 billion (US$4 billion) for its fifth Japan logistics development fund, marking the unit's largest closed-end institutional fundraise to date.

The fund, Japan Logistics Development Partners V LP, closed at its maximum target, known as a hard cap, and is nearly 50 per cent larger than its 2021 predecessor, Ares said in a statement on Tuesday. The fund will mainly invest in developing modern logistics facilities in Japan's key metropolitan markets, including Greater Tokyo, Greater Osaka and Nagoya, Ares said.

The fund attracted money from pension funds, sovereign wealth funds, insurers, financial institutions and other large investors across North America, Asia-Pacific, Europe and the Middle East, according to the Ares statement. Canada Pension Plan Investment Board, which has backed every Japan logistics fund since their launch in 2011, is a cornerstone investor in the fund and committed ¥150 billion, Ares said.

“We continue to see value in modern logistics infrastructure supported by resilient demand, evolving supply chains and a positive outlook for rental growth,” said Gilles Chow, managing director, head of real estate Asia Pacific at CPP Investments.

Ares said the fund has ¥1.7 trillion of total investment capacity and had already committed to projects representing about ¥450 billion in total investment. Marq Logistics, Ares' global logistics real estate platform, will develop and operate the assets. Marq manages about 120 million sq ft (11 million sq m) in Japan and more than 655 million sq ft globally as of 30 Jun, according to Ares.

Real estate services firm CBRE has projected in a report that rents for large multi-tenant logistics facilities would rise in Japan's four major metropolitan areas by late 2027, as demand for modern logistics space grows across Japan. Ares Management had more than US$671 billion in assets under management as of 30 Jun, while Ares Real Estate managed about US$121 billion in assets, according to the group's statement.