The International Finance Corporation (IFC) is providing up to US$120 million in green debt financing to a leading logistics property group in Asia-Pacific to develop two logistics estates in the greater Jakarta area.
Under an agreement announced on December 14, IFC is supporting LOGOS to deliver modern and high-quality logistics infrastructure in Indonesia’s rapidly growing e-commerce market while supporting business expansion and promoting competitiveness in the country’s warehousing sector. This will help address a critical infrastructure gap in Indonesia and at the same time create jobs and support the country’s recovery from the impact of Covid-19.
Both estates – LOGOS Cikarang Logistics Park and LOGOS KLOG Cibitung Logistics Hub – are targeting a Green Mark award certification and are designed to comply with IFC’s green building standards. This will include a wide range of sustainability initiatives to reduce greenhouse gas emissions during construction and operation of the projects.
Commenting on its first green loan from IFC, LOGOS managing director Stephen Hawkins says sustainability is a key driver of their business and they are actively incorporating sustainable initiatives across all their projects and operations regionally. “IFC’s green loan is an important part of this commitment and will support us in delivering these two modern, high-quality and sustainable logistics estates for the Indonesian market,” he adds.
In granting the debt financing, IFC notes that Indonesia is home to an expanding middle class and undergoing rapid urbanization – both factors that are contributing to a boom in e-commerce that has the sector on track to be worth US$124 billion by 2025. Retailers and e-commerce players are, however, faced with challenges due to Indonesia’s archipelagic geography and the fragmented and nascent logistics sector. As a business enabling infrastructure, warehouses play a key role in attracting foreign direct investment from multinational companies.
IFC vice-president for Asia and Pacific Alfonso Garcia Mora says the IFC green investment, in sync with the Indonesian government’s sustainability agenda, will help address a significant lack of adequate warehousing space in the country, which is critical in the wake of the e-commerce boom amid the pandemic.
The development of the two logistics hubs is expected to generate 1,000 jobs during the construction phase along with hundreds of indirect jobs created by potential tenants, including global third-party logistic firms and large e-commerce groups.
LOGOS is a growing logistics specialist with operations across Australia, China, Singapore, Indonesia, Malaysia, Vietnam, South Korea, India and New Zealand. Its shareholders include ARA Asset Management, a leading Asia-Pacific real assets fund manager with S$110 billion (US$82.70 billion) in gross assets under management globally; Ivanhoé Cambridge, a Canadian real estate industry leader investing in high-quality properties and companies with C$64 billion (US$50 billion) in real estate assets globally; and the group’s founders.
LOGOS manages every aspect of logistics real estate, including investment management, sourcing land or facilities and undertaking development and asset management, on behalf of some of the world's leading global real estate investors. The group has over 6.7 million square metres of property owned and under development, with a completed value of US$10.2 billion, across 24 ventures, including the Singapore-listed ARA LOGOS Logistics Trust.
