(Updated)

Sime Darby Property unit JV’s first industrial development fund eyes RM850m from investors

Sime Darby Property subsidiary JV’s first industrial development fund eyes RM850m from investors

Sime Darby Property subsidiary JV’s first industrial development fund eyes RM850m from investors

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KUALA LUMPUR (Sept 29): Sime Darby Property Bhd’s wholly-owned subsidiary Sime Darby Property (Capital Holdings) Pte Ltd (SDPCH) has formed a joint venture (JV) with LOGOS Property Group Ltd’s 100%-owned subsidiary LOGOS SE Asia Pte Ltd under an industrial development fund collaboration that aims to initially raise US$200 million (about RM850 million) in seed money from accredited and institutional investors to finance the planned development of industrial property in Klang, Selangor.

In a filing with Bursa Malaysia, Sime Darby Property said SDPCH and LOGOS SE on Wednesday incorporated a JV company called Industrial Joint Venture (Holdings) Pte Ltd in Singapore on a 51:49 shareholding basis.

"The first seed fund of the JV is intended to be structured as a Singapore limited partnership targeting total capital commitments equivalent to US$200 million or approximately RM850 million from accredited and institutional investors. 

"To this end, Sime Darby Property has allocated a 177-acre (about 70.8ha) site within its prime Bandar Bukit Raja township in Klang for the purpose of this JV.

"The fund’s primary focus is to develop and invest in build-to-suit to lease or sell assets, primarily for clients in the logistics sector,” Sime Darby Property said.

It added that the purpose of the JV is to provide fund management and development services to industrial development funds established by the JV.

The JV is expected to leverage synergies between the two companies, that is, Sime Darby Property’s presence and track record in the Malaysian property market and its extensive land bank in strategic areas earmarked for industrial development, and LOGOS Property’s specialist experience in developing property solutions in the logistics sector.

"The provision of services by the JV and its subsidiaries and the establishment of funds will enhance Sime Darby Property’s existing investment and asset management business, which currently manages five million square feet of total net lettable area mainly across the industrial, commercial, retail and education sectors in Malaysia, Singapore and the UK. 

"This is part of Sime Darby Property’s ongoing efforts to diversify its business and broaden its income streams beyond property development towards becoming a sustainable real estate development company by 2025," said Sime Darby Property.

"Prospects of the JV are predicated on the success of each fund, which will focus and capitalise on the sub-themes of logistics and warehousing, e-commerce and the cold chain, which are in high demand following global trade flows and supply chain developments, as well as rising e-commerce growth propelled by Covid-19 trends alongside a shift in consumer preferences. 

"As such, the outlook for the JV is positive,” it added.

Sime Darby Property said LOGOS Property’s experience in providing sustainable, integrated logistics solutions with green building certifications would also be replicated at these facilities, with the implementation of the latest warehouse and logistics automation technology while simultaneously maximising land efficiency.

At noon break on Wednesday, Sime Darby Property’s share price settled down half a sen or 0.78% at 63.5 sen, with a market value of about RM4.32 billion.

Sime Darby Property’s latest-reported net assets per share stood at RM1.35.