Global Logistic Properties (GLP) is co-investing with GIC to acquire one of the largest logistics real estate portfolios in the US for US$8.1 billion. The transaction is expected to be completed in the first quarter of 2015 and GLP will initially hold a 55% stake in GLP US Income Partners I and GIC the remaining 45%. GLP intends to reduce its stake to 10% by August 2015 as part of expanding its fund management platform and has already received strong interest from capital partners looking to invest in the US logistics market.
GLP’s initial equity commitment (55% ownership day one) will be funded by cash on hand and a short-term credit facility. The company’s final 10% stake represents US$330 million of equity, or 4% of GLP’s net asset value.
Following this transaction, GLP’s fund management platform will grow by 61% to US$21.3 billion, the company said.
GLP’s 10% investment in GLP US Income Partners I is expected to generate a pre-tax cash-on-cash yield of 9% in the first year. This includes GLP’s share of operating results and fund management fees.
Ming Z. Mei, co-founder and chief executive officer of GLP, said: “This transaction gives us immediate scale as well as the best team in the US logistics market. The local management team is very experienced and we expect significant synergies given that we have worked with and alongside more than half of them previously. Investor interest for GLP US Income Partners I is strong and we remain confident of completing the fund syndication by August 2015.
“While we are very excited to broaden GLP’s market exposure and selectively expand our footprint into the best logistics markets internationally, China remains our key growth market. GLP will continue to focus on executing our expansion plans in China, Japan and Brazil, while also growing our fund management platform.”