Jakarta-based retail developer NWP Property is broadening its mission with the launch of a joint venture to address an undersupply of modern warehouses in Indonesia’s logistics market.

Rebranded this year after formerly doing business as NWP Retail, the company backed by private equity major Warburg Pincus and IDX-listed City Retail Developments has teamed with Japanese warehouse builder CRE on the JV and tapped local logistics veteran Bonny Setiawan as chief executive.

The venture will establish a big-box logistics platform to meet growth driven by the expansion of omni-retail platforms such as NWP’s community malls in Indonesia, the partners said Tuesday in a release. The JV has been seeded with a pre-leased, built-to-suit warehouse in Jakarta that will begin construction in the second half of 2022.

“The supply of Indonesian warehouse space is meaningfully behind its industrial peers, such as China and Japan, who have 10-40 times the warehouse space per capita, respectively, compared to Indonesia,” said Timothy Daly, NWP’s chief executive and president director. “The durable megatrends driving the demand for holistic omni-commerce infrastructure will accelerate into the next decade, and we see unparalleled synergies in this venture alongside our existing last-mile fulfilment centre platform and our growing community retail platform.”

New Economy Infrastructure

Since its founding in 2015, NWP has grown from four seed projects to over 50 developments at present, spanning more than 1 million square metres (10.8 million square feet) of gross floor area in Indonesia’s retail sector.

In addition to the Greater Jakarta area, NWP has projects in provincial capitals Medan, Semarang, Bandung, Kendari and Bengkulu. In early 2019 the company raised $200 million from the Korean Teachers’ Credit Union and a fund managed by CITIC Securities, as well as from its primary backer, Manhattan-based Warburg Pincus.

NWP expanded its business this year by adding logistics — including modern warehouses, distribution centres and specialised urban last-mile fulfilment centres — to create what it calls “the largest institutional New Economy-enabled infrastructure platform in Indonesia”.

With the new logistics platform, NWP will draw on CRE’s institutional experience in logistics and regional networks and Setiawan’s expertise in building modern logistics platforms, the company said.

Shed Professional

A former executive director at Swiss banking giant UBS, Setiawan most recently served as chief executive of Indonesian logistics developer Mega Manunggal Property.

MMP under his leadership joined forces with Singapore-based Alpha Investment Partners and Canada’s Manulife on a $200 million Indonesian logistics venture in 2020.

That JV, originally announced in 2019 but delayed by the onset of COVID-19, was set up to acquire stakes in three single-tenanted properties and one multi-tenanted logistics facility in the Greater Jakarta area from MMP to create a seed portfolio with a total net lettable area of over 163,000 square metres.

In 2016, MMP entered into a partnership with Singapore sovereign wealth fund GIC to develop up to 500,000 square metres of logistics warehouses with a focus on the Greater Jakarta and Greater Surabaya regions.