Keppel's Alpha in Indonesia logistics venture with Manulife unit, Mega Manunggal Property

KEPPEL Corporation's Alpha Investment Partners, Manulife subsidiary Asuransi Jiwa Manulife Indonesia, and Mega Manunggal Property (MMP) have entered into a new venture focusing on Indonesia's logistics property sector.

Comprising Keppel-MMP Indonesia Logistics Fund and an Indonesian parallel fund, as well as co-investment capital from Manulife, the venture has an initial target size of US$200 million.

It has received around US$93 million in initial capital commitments from venture partners, including Asuransi Jiwa Manulife Indonesia.

The venture intends to acquire stakes in four logistics assets in the Greater Jakarta area from MMP for its initial portfolio. Three of the properties will be single-tenanted, with the remaining one being multi-tenanted.

With a total net lettable area of over 163,000 square metres, the assets have an occupancy of more than 96 per cent. They also serve established tenants in the consumer goods, logistics and e-commerce industries, such as Unilever, Li & Fung and DHL.

Alpha, a private fund manager under Keppel Capital - the asset management arm of Keppel Corp, will be the investment manager of the venture. MMP will be Alpha's strategic adviser and the property manager of the venture's logistics properties.

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Subject to conditions, the sale of the four assets by MMP to the venture has been approved by MMP's shareholders at its extraordinary general meeting on Dec 20, 2019.

Alpha chief executive officer (CEO) Alvin Mah said: "With Indonesia's growing middle-class population driving the rapid growth in consumption and e-commerce, coupled with the limited supply of modern logistics facilities in Jakarta, the Indonesian logistics property sector is seeing strong demand."

He added that the venture will allow Alpha to capture opportunities arising from this evolving landscape and offer its venture partners exposure to the high growth potential of Indonesia's logistics property sector.

MMP CEO Bonny Budi Setiawan said by setting up this platform, MMP has just taken its first step in implementing an asset-light strategy to recycle capital from its stabilised portfolio.

The move will not only enable MMP to monetise its assets but also offer capital sustainability to support the public logistics space service provider in capturing opportunities in Indonesia's growing modern logistics property market.

Manulife Indonesia president director and CEO Ryan Charland, and Kenny Lam, senior managing director, head of Asia real estate investments for Manulife, said the acquisition fits well with the company's long-term investment strategy for the Asia-Pacific market and will bring added value to the company and Indonesia in the long run.

Keppel Corp does not expect the transactions to have any material impact on its earnings per share and net tangible asset per share for its current financial year.

Keppel Corp shares were trading at S$5.97 as at 9.25am on Monday, down S$0.07 or 1.2 per cent.