IGIS pre-purchases Amazon, FedEx warehouses

IGIS Asset Management Co., South Korea’s largest real estate asset manager, has made a forward funding deal of three logistics centers under development in the US, according to investment banking sources on Dec. 21. Valued at around 330 billion won ($276.7 million), the construction will be completed in 2023.

Two centers, one located in Cleveland, Ohio, and another in Albany, New York, will be leased to global e-commerce giant Amazon. The other, located in Omaha, Nebraska, will be leased to global shipping giant FedEx. The two companies will each rent the warehouses for 15 years.

With a high 4% cap rate on the purchase, the deal was made through a joint venture that IGIS and US real estate developer Scannell Properties created in August of this year.

When the construction project is completed in 2023, the JV will transfer its ownership of the warehouses to IGIS, and the Korean real estate investment manager will fully own the properties, an IGIS official said. The properties are expected to bring stable dividend income and huge gains from future sales, the official added.

IGIS has co-invested in three pre-completed Amazon logistics centers in the US through another JV it founded with Scannell Properties. In December 2020, the Korean asset manager and Korea’s Hana Financial Investment Co. jointly acquired the properties under construction for $390 million, respectively located in Stafford, Virginia; Kansas City, Missouri; and Lakeville, Minnesota. The warehouses were under a 15-year contract with an extension option. 

In July 2019, the Korean asset manager created Korea’s first public fund investing in logistics centers and raised 230 billion won to purchase three Amazon warehouses in Europe. The fundraising represented about 38.7% of the 593.6 billion won acquisition price including fees and other expenses at the time. The warehouses, located in Barcelona, Paris and Bristol, England, are under 20-year contracts. 

IGIS manages $34 billion under management as of the end-2020, with a total of 234 investments since its inception in 2010.

Write to A-Young Yoon at youngmoney@hankyung.com
Jihyun Kim edited this article.