Prologis to Boost Japan Rents, Buy Warehouses on Abenomics Bonus

November 26, 2013 Leave a comment

Prologis to Boost Japan Rents, Buy Warehouses on Abenomics Bonus

Prologis Inc. (PLD), the world’s biggest warehouse owner, plans to increase rents and spend as much as $600 million a year to develop warehouses in Japan as Prime Minister Shinzo Abe’s policies boost corporate confidence. The company expects rents to rise about 3 percent annually “for a while” and will invest $500 million to $600 million a year in warehouses, said Hamid Moghadam, chairman and chief executive officer of San Francisco-based Prologis. That compares with the the average annual investment of $400 million to $600 million historically, he said.Abe’s pledge to end 15 years of deflation and the Bank of Japan’s monetary easing policy, dubbed Abenomics, have boosted sentiment, contributing to a recovery in the nation’s property market. Industrial spaces, such as warehouses, returned 7.6 percent on average for the year ended July, more than double that for office buildings, according to London-based Investment Property Databank Ltd.

“Abenomics has created a lot of confidence and that is an added bonus,” Moghadam said in an interview in Tokyo today. “Going forward, I am actually pretty optimistic about the business even more so than before.”

Prologis, which manges 2,942 buildings in 21 countries had $46.9 billion of assets under management as of September 2013, according to the company’s website. Japan is Prologis’s second biggest market after the U.S. with 42 properties, according to a company’s presentation material. Its customers include Seattle-based Amazon (AMZN).com, Inc., the world’s largest online retailer, Atlanta-based Home Depot Inc. (HD) and Tokyo-based Nippon Express Co. (9062)

Confidence among Japan’s large manufacturers rose to the highest since the early stages of the global credit crisis in 2007, a quarterly Tankan survey in October showed.

Real estate deals in Japan will rise to as much as 4 trillion yen ($39 billion) this year, the most since 2008, according to Chicago-based Jones Lang LaSalle Inc. (JLL)

To contact the reporters on this story: Kathleen Chu in Tokyo at kchu2@bloomberg.net; Katsuyo Kuwako in Tokyo at kkuwako@bloomberg.net

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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