Sime Darby Property Subsidiary JV Seeks RM850 Million From Investors for Its First Industrial Development Fund

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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 wholly-owned subsidiary LOGOS SE Asia Pte Ltd for the purpose of establishing an industrial development fund. The fund will initially raise US$200 million (approximately RM850 million) in seed capital from accredited and institutional investors.

Sime Darby Property said in a statement to Bursa Malaysia on Wednesday that SDPCH and LOGOS SE formed a joint venture business Industrial Joint Venture (Holdings) Pte Ltd in Singapore on a 51:49 equity basis.

“The JV’s first seed fund will be organised as a Singapore limited partnership with an initial objective of US$200 million or about RM850 million in capital commitments from accredited and institutional investors.

“To this end, Sime Darby Property has designated a 177-acre (about 70.8ha) property within its premier Bandar Bukit Raja development in Klang for this JV.

“The fund’s principal objective is to develop and invest in build-to-suit properties for the purpose of leasing or selling assets, primarily for logistics clients,” Sime Darby Property said.

Sime Darby Property stated that the JV’s goal is to provide fund administration and development services to the JV’s industrial development funds.

According to Sime Darby Property, the JV is expected to leverage synergies between the two companies — derived from Sime Darby Property’s presence and track record in the Malaysian property market, as well as the company’s extensive land bank in strategic areas earmarked for industrial development — as well as LOGOS Property’s specialist experience in developing property solutions.

“The JV and its subsidiaries’ provision of services and development of funds would complement Sime Darby Property’s existing investment and asset management business, which presently manages five million square feet of total net lettable area in Malaysia, Singapore, and the United Kingdom.”

“This is in line with Sime Darby Property’s continued efforts to diversify its business and diversify its revenue streams beyond property development in order to transform into a sustainable real estate development company by 2025.

“The JV’s prospects are contingent on the success of each fund, which will focus and capitalise on the sub-themes of logistics and warehousing, e-commerce, and cold chain, all of which are in high demand as a result of global trade flows and supply chain developments, as well as rising e-commerce growth fueled by Covid-19 trends and a shift in consumer preferences.

“As such, the JV’s outlook is favourable,” Sime Darby Property stated.

Sime Darby Property stated that LOGOS Property’s experience in providing sustainable, integrated logistics solutions with green building certifications would be replicated at these facilities through the use of cutting-edge warehouse and logistics automation technology while optimising land efficiency.

Sime Darby Property’s share price ended down half a sen or 0.78 percent to 63.5 sen at Bursa’s 12.30pm break on Wednesday, giving the business a market value of approximately RM4.32 billion based on the company’s 6.8 billion issued shares.

Sime Darby Property’s net assets per share were RM1.35 as of the most recent financial report.

Published by Zack Baharum

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