Global Logistic Properties Limited (GLP), a leading provider of modern logistics facilities in China, Japan and Brazil, will be co-investing with Singapore’s sovereign wealth fund GIC to acquire IndCor Properties Inc for $8.1 billion.
“The transaction is expected to be completed in the first quarter of 2015 and GLP will initially hold a 55 per cent stake in GLP US Income Partners I and GIC the remaining 45 per cent. GLP intends to reduce its stake to 10 per cent 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 per cent ownership day one – will be funded by cash on hand and a short-term credit facility. The company’s final 10 per cent stake represents US$330 million of equity, or four per cent of GLP’s net asset value,” the company said in a statement.
Following this transaction, GLP’s fund management platform will grow by 61 per cent to $21.3 billion.
GLP’s 10 per cent investment in GLP US Income Partners I is expected to generate a pre-tax cash-on-cash yield of nine per cent in the first year. This includes GLP’s share of operating results and fund management fees, the company 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,” said Ming Z. Mei, co-founder and chief executive officer of GLP.
“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 expansion plans in China, Japan and Brazil, while also growing our fund management platform,” he added.
IndCor had recently planned a public listing at the same valuation, but following the deal, it will no longer be pursuing a listing. It owns and operates a portfolio of 117 million square feet of high-quality industrial properties in key markets throughout the United States.
The company’s assets are principally located in desirable in-fill industrial markets, which benefit from proximity to key domestic and global transportation hubs, major logistics and warehouse and distribution networks, as well as large population concentrations, the statement from Blackstone added.
The company’s properties include a 16.3 million-square-foot portfolio from DEXUS Property Group and a 23.3 million-square-foot CalWest portfolio from Walton Street Capital.
This deal is the latest in the Singapore’s sovereign wealth fund GIC’s real estate-related investment spree.
Last month GIC had forayed into New Zealand by setting up a real estate joint venture with Goodman Property. In October, it had concluded a series of real estate deals, including making its first corporate investment in Turkey, where it bought a minority stake in Istanbul-based Ronesans Gayrimenkul Yatirim (RGY) for €250m ($312.4 million).
In October, the fund had also bought a building in Tokyo – Pacific Century Place Marunouchi – for $1.7 billion from Secured Capital Japan Co, the real estate arm of Hong Kong-based alternative-asset manager PAG.
In September this year, Singapore state fund along with two Canadian pension funds invested $700 million in Greenwich-based XPO Logistics Inc, that in into airfreight forwarding and warehouse management.
GIC has a history of buying real estate assets from Blackstone, the world’s largest PE firm. Last year, in a $2.7 billion deal, the Singapore fund bought 50 per cent of Blackstone’s stake in London’s Broadgate office.