Singapore’s CapitaLand Investment and Taiwan-based Ally Logistic Property have joined forces with Thai developer Pruksa Holding to establish a Southeast Asia warehouse fund with a target size of S$1 billion ($740 million) in assets under management.

The three partners have committed an initial equity investment of S$270 million to CapitaLand SEA Logistics Fund with an option to increase their investment up to S$540 million, CapitaLand Investment said Monday in a release.

The SGX-listed asset management arm of Temasek Holdings-owned CapitaLand will be CSLF’s fund manager, while ALP will provide automated warehouse technology and Pruksa will lend development expertise.

“CLI firmly believes in the long-term growth potential of the smart logistics infrastructure as a strong alternative asset class that will benefit from the favourable economic fundamentals in Southeast Asia,” said Patricia Goh, managing director for Southeast Asia at CapitaLand Investment. “The partnership will strengthen our global logistics ecosystem catering to requirements from a full spectrum of end-users.”

Tackling Supply Shortage

The new fund seeks to capitalise on a lack of quality warehouse assets in Southeast Asia, where the overall supply chain is fragmented and industry players are not well-integrated, according to CapitaLand Investment.

CSLF aims to develop next-generation “smart warehouses” featuring automation, robotics and digitisation to help overcome labour-related challenges and logistics complexities, optimise land and space utilisation, and enable faster and more efficient inventory movement.

Better known as a residential developer, Bangkok-based Pruksa is entering the industrial real estate and logistics sector for the first time as it tries to diversify and achieve stable recurring income.

“Our partnership with CLI and ALP to develop the smart logistics infrastructure as a service will take Southeast Asia’s logistics value chain to the next level of innovative solutions, offering more cost-efficient, less time-consuming and enhanced product flow to enable customers to do more with less resources,” said Uten Lohachitpitaks, group CEO of Pruksa Holding.

Automated Infrastructure

Founded in 2014, ALP has grown its warehouse portfolio to 646,000 square metres (6.9 million square feet) of gross floor area in Taiwan and 168,000 square metres of GFA in Malaysia, with plans to expand into Vietnam.

The Taipei-headquartered firm offers warehouse tech including robotic equipment and space planning, automation system integration and optimisation, and data analytics.

CEO Charlie Chang said ALP’s industry knowledge would help drive corporate growth and sustainable development in Southeast Asia’s logistics value chain.

“We look forward to working with our overseas strategic partners to shape the direction of the industry and continue to drive progress,” Chang said. “Together, we will continue to evolve and redefine the industry, and we are certain that our contributions will play a vital role in the global economy.”