IGIS Asia, Quadreal to form JV for warehouse development in Korea

IGIS Asia Investment Management Pte., the Singapore-based subsidiary of South Korea’s largest real estate manager IGIS Asset Management, and Vancouver-based real estate investor Quadreal Property Group will set up a $1 billion joint venture to develop grade-A logistics centers in Korea, IGIS Asset said on Tuesday.

The JV will provide warehouses for e-commerce, retail, cold storage and third-party logistics (3PL), outsourced logistics services for a company’s supply chain. IGIS Asia will develop and operate assets with Quadreal’s investment.

Korea is one of the world’s most highly penetrated e-commerce markets. It ranked third globally with retail e-commerce making up 32.2% of total retail sales, according to global research firm eMarketer’s report in January. The top market is China with 46.3%, followed by the UK with 36.3%.                  

"Quadreal will continue to see e-commerce-led occupational demand and a shortage of grade-A warehouses in proximity to urban centers, which is forecast to underpin strong rental and capital growth,” said Peter Kim, managing director of Asia, Quadreal.

IGIS Asia is seeing not only increasing demand for high-quality logistics assets in emerging sub-markets outside of the Seoul metropolitan area but also in some industries other than e-commerce as Korean manufacturers are strengthening their local supply chains, said the Singapore-based firm’s CEO Steve Oh.

Founded in 2020, IGIS Asia provides a 322,000-square-meter logistics center on a lot in Korea.

The parent IGIS Asset, managing $45.6 billion in assets as of end-2021, made a forward funding deal of 330 billion won ($228.9 million) for two Amazon logistics centers and one FedEx warehouse in the US last December.

IGIS Asset and Korea’s Shinhan Global Investment Banking (GIB) jointly injected $93 million into the project, with additional $188 million in funding from Shinhan Financial Group, for a New Mexico-based Amazon warehouse in 2020 and sold the asset for $352 million in January.

Quadreal owns and manages more than 11 million square meters of properties globally. With assets under management totaling $67.1 billion, it is specialized in real estate debt investments, such as fixed-term, construction and mezzanine mortgage funds focusing in Canada and the US.

Write to Ji-Hye Min at spop@hankyung.com
Jihyun Kim edited this article.