JAKARTA (TheInsiderStories) - PT Mega Manunggal Property Tbk (IDX: MMLP), an Indonesian publicly listed logistics developer and Singapore’s sovereign wealth fund GIC have entered into a partnership to develop a portfolio of quality logistics warehouses in Indonesia over the next three years, with a focus in the Greater Jakarta region and Greater Surabaya.
The partnership aims to meet the increasing demand by companies for sophisticated inventory systems which cannot be fulfilled by traditional warehouses.
President Director & CEO of MMP Fernandus Chamsi, said, “Through this partnership with GIC, MMLP will be able to accelerate the development of logistic properties in the hope of achieving 500,000m2 of net leasable area in the next three years. The partnerships will also focus on increasing productivity, good operational and quality of our human resouces, as well as good corporate governance”.
Mr Loh Wai Keong, Managing Director and Co-Head Asia, GIC Real Estate, said, “This is our first investment in Indonesia’s logistics sector. We are attracted by the long-term growth of this sector, which is underpinned by the strong consumption of Indonesia’s rapidly rising middle class. We believe GIC’s knowledge and experience investing in logistics both in Asia as well as other global markets will add value to this partnership.”
Previously Mega Manuggal Property has joined with Japanese logistic firm Daiwa House Industry to build central business districts and logistics centers across the country. Daiwa House will contribute capital and marketing for the projects, Fernandus said.
Mega Manunggal will sell up to 49 percent of its shares in Mega Tridaya Property to Daiwa House, Fernandus said. The first joint project is a Rp 260 billion ($19 million) warehouse for Lastana Express Indonesia, the company behind e-commerce giant Lazada.
The warehouse will be constructed on a nine-hectare lot in Cibinong, West Java, with a total storage area of 60,600 square meters. Half of the project will be operational next year, with the second half targeted for completion in 2018.
The Lazada contract is expected to boost Mega Manunggal’s revenue by 40 percent from an estimated Rp 167 billion this year.
While, GIC recently invest a total of Rp5.2 trillion ($387 million) in Trans Retail, the retail arm of Indonesian conglomerate CT Corp, which operates stores under the Carrefour and TRANSmart brands.
Indonesian consumption faltered last year as growth fell to its weakest pace in six years, but it is showing signs of picking up.