GIC and Prologis Partner on $1.6B U.S. Logistics Venture
Singapore's sovereign wealth fund GIC is deepening its exposure to U.S. industrial real estate through a new partnership with Prologis, one of the sector's largest operators. The two have launched a $1.6 billion joint venture targeting build-to-suit logistics facilities in key American markets, a move that reflects ongoing demand for purpose-built distribution space even as broader development slows.
The venture will start with an initial portfolio of about 4.1 million square feet and is structured to accommodate additional investment as new projects are identified. Prologis, which manages $230 billion in assets and oversees 1.3 billion square feet globally, will contribute its development and operations platform, while GIC provides institutional capital aligned with long-term horizons.
While new speculative industrial construction has eased over the last year amid high financing costs and moderating leasing activity, the build-to-suit segment has held its ground. In 2025, Prologis reported that custom projects represented more than 60 percent of its $3.1 billion in development starts—a notable shift that underscores how tenant requirements are shaping supply.
Major tenants are showing a preference for controlled buildouts with secured occupancy terms, particularly for facilities designed around automation and regional distribution efficiency.
For sovereign investors like GIC, the asset class holds great appeal. Industrial properties have maintained some of the steadiest performance of any U.S. real estate class, supported by e-commerce growth, reshoring of manufacturing, and sustained consumption. Goh Chin Kiong, GIC's chief investment officer of real estate, called the U.S. industrial market a "strong long-term investment theme."
Such joint ventures are viewed as both a defensive and strategic play. Build-to-suit projects typically carry a lower leasing risk because they are pre-committed by tenants whose facilities are mission-critical. Unlike speculative warehouses that depend on future absorption, these assets often come with long-term contracts that stabilize returns and hedge against cyclical market softening.
Prologis has increasingly used its Strategic Capital arm—through which the new venture will operate—to co-invest with large institutional players. These partnerships allow the company to scale development pipelines without overleveraging its own balance sheet while offering investors exposure to operational assets with built-in demand. The approach has been especially appealing during a period when transaction volumes in the broader industrial market have cooled.
The GIC-Prologis deal also signals renewed confidence in U.S. logistics infrastructure, even as new construction activity remains below pre-2023 levels. With tenants now more likely to secure purpose-built sites for automation-heavy operations, the build-to-suit model appears positioned to remain a preferred vehicle for aligning long-term corporate and investor strategies.
Source: GlobeSt/ALM