GIC-backed Global Logistics Properties launches $620m fund

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Warehouse provider Global Logistic Properties (GLP), which is listed on the SGX Mainboard and backed by Singapore’s sovereign wealth fund GIC, has launched a $620 million fund – GLP US Income Partners III –  that is expected to invest $1.5 billion over three years. M3 Capital Partners (HK) Limited is acting as exclusive financial advisor to GLP in connection with the formation of GLP US Income Partners III.

GLP, in a statement Thursday said six global institutional investors from Asia, the US and Middle East have committed for a stake of about 90 per cent.

Overview extracted from investor presentation of GLP US Income Partners III

This development comes a day after it completed the acquisition of $1.1 billion in US properties, The new funds has secured $620 million in equity commitments.

GLP, whose largest shareholder is GIC, is the asset manager and will retain a stake of about 10 per cent post-syndication. According to the company, the fund will be used to hold a newly acquired $1.1 billion logistics portfolio from Dallas-based developer Hillwood.

New Harvest Holdings, LLC, GLP’s indirect wholly-owned subsidiary, is a limited partner (LP) of the fund, with about 9.7 per cent of the fund’s aggregate capital commitments.

GLP elaborates that an initial $700 million from this portfolio will be acquired in December 2016. A further $400 million of identified pipeline assets will be acquired in phases. Given its role as asset manager, GLP has a US$400 million mandate for acquisitions in the US, as part of satisfying the funds investment criteria.

This transaction is immediately accretive to GLP, with GLP’s approximate 10 per cent equity stake of $60 million expected to generate a 13 per cent return-on-equity in the first year of investment.

Commenting on the matter, Ming Z. Mei, CEO of GLP, said: “Our US fund management platform continues to perform strongly. Capital raising for our third US fund exceeded our expectations. We saw strong support from new and existing institutional investors, which is testament to our strong track record as an asset manager and strong investor demand for high quality US logistics real estate.”

Market overview of GLP US Income Partners III. Extracted from investor presentation

GLP is currently the second largest logistics property owner and operator in the US with a footprint of 173 million sq ft (16 million sqm). GLP is also the largest provider of modern logistics facilities in China, Japan and Brazil. Its fund management platform has posted compound annual growth (CAGR) of 83 per cent over the past five years to $39 billion to date.

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