SOFAZ to invest in warehouse development in Japan

Azerbaijan’s oil fund SOFAZ will finance warehouse development projects in Japan. Pan-Asian logistics real estate developer and operator e-Shang Redwood has announced that $100 million investment came one month after a group of Chinese investors, including GF International Investment Management Ltd., Huarong International, China Everbright Ltd. and CMBC International, invested $300 million in e-Shang Redwood as it prepares for an initial public offering this year.

SOFAZ investment will allow to compensate a gap between the volumes of supplies and a growing demand for modern storage room in Japan.

e-Shang Redwood was initially founded in 2011 by Warburg Pincus and two Chinese entrepreneurs. It has grown rapidly via acquisitions and massive institutional investments to become a pan-Asian warehouse developer with 7.3 million square meters of projects owned and under development across the region.

SOFAZ Head Shahmar Movsumov said that the making of these investments is totally in line with the strategy of the Fund.

"This investment is consistent with our strategy of identifying through rigorous diligence and then committing to the most compelling and focused strategies by geography and asset class. Development of state-of-the-art logistics real estate in Japan, which has witnessed increasing levels of demand associated with growth of e-commerce industry particularly in Tokyo and Osaka is such a strategy and complements well our existing real estate portfolio," Movsumov said.

Being a special purpose state organization, primary objectives of SOFAZ are to help maintain macroeconomic stability in the country and to generate wealth for present and future generations.

SOFAZ, established in 1999, has $35 billion in assets under management, 10% of which is allocated to real estate investments.

The practice of investing in real estate abroad has already allowed the Fund to acquire Gallery Actor, a mixed-use office and retail complex located on Pushkin Square in Moscow for $133 million, an office complex in London's West End for £177.35 million and a property in Paris for €135 million, and Pine Avenue Tower worth $447 million in Seoul.

In 2016, SOFAZ completed the purchase of Palazzo Turati office building in Italy, Milan.