GLP to Acquire US$1.1 billion US Logistics Portfolio
GLP has entered into a definitive agreement to acquire a US$1.1 billion US logistics portfolio from Hillwood Development Company, LLC. A US$700 million portfolio is in the process of being acquired in December 2016, with the remaining US$400 million development portfolio to be acquired in phases upon completion and full lease-up.
- Initial closing of a US$700 million portfolio expected in December 2016; further US$400 million development portfolio to be acquired in phases upon completion and full lease-up
- GLP expects to sign with capital partners by initial closing and retain a 10% stake post-syndication
- Accretive transaction solidifying GLP’s position as the 2nd largest logistics property owner and operator in the US
- 15 million sf portfolio is one of the highest quality logistics portfolios in the US
Chicago, 13 September 2016 – GLP, the leading global provider of modern logistics facilities, has entered into a definitive agreement to acquire a US$1.1 billion US logistics portfolio from Hillwood Development Company, LLC (“Hillwood”). A US$700 million portfolio is in the process of being acquired in December 2016, with the remaining US$400 million development portfolio to be acquired in phases upon completion and full lease-up. Investor demand to partner with GLP in the US logistics market is strong and GLP expects to sign with capital partners by initial closing. GLP will be the asset manager and expects to retain a stake of approximately 10% post-syndication1.
GLP’s Fund Management Platform Generates Attractive Returns
The US$1.1 billion transaction is expected to be funded by US$470 million of equity and US$635 million of debt. GLP’s target 10% equity stake of US$47 million is expected to generate a 13%2 return-on-equity (including fees) in the first year of investment.
GLP expects to fund its equity commitment with cash on hand and existing credit facilities. GLP has secured long-term, low-cost debt at a fixed rate, which locks in attractive returns for GLP.
Chuck Sullivan, President and Chief Operating Officer of GLP US, said: “The portfolio being acquired from Hillwood is one of the highest quality logistics real estate portfolios in the US. This transaction, which will be immediately accretive to GLP, demonstrates our ability to leverage our existing platform to pursue enhanced network benefits in the strongest US markets.”
High Quality Portfolio Further Consolidates GLP’s US Presence
The acquisition solidifies GLP’s position as the second largest owner and operator of logistics facilities in the US with no additional overhead. The initial closing portfolio of US$700 million is 100% leased with a weighted average lease expiry of 9 years. A further US$400 million of development assets shall be acquired in phases upon completion and full lease-up. The acquisition structure of the development assets integrates a set of stringent lease-up metrics which lock in long-term tenants for GLP while eliminating lease-up risk.
The portfolio is being acquired from Hillwood, a premier property developer in the US sponsored by Ross Perot, Jr. The 15 million sq ft (1.4 million sqm) portfolio has a strong concentration in desirable locations expected to benefit strongly from the growth of e-commerce in the US. This transaction enlarges GLP’s US footprint to 187 million sq ft (17 million sqm), with the US representing 8% of GLP’s SFRS3 Net Asset Value. GLP is the second largest logistics property owner and operator in the US and the largest in China, Japan and Brazil.
1Syndication is subject to customary regulatory approvals in investors’ respective home countries and the US (as applicable)
2 Determined using, among other things, estimates of fund management fees and rental income
3 SFRS refers to Singapore Financial Reporting Standards. SFRS NAV does not include the full value of GLP’s fund management platform and future value creation from development
About GLP (www.glprop.com)
GLP is a fund manager, developer and owner-operator of modern logistics facilities. As of 30 June 2016, GLP owns and operates a global portfolio of 52 million square meters (560 million square feet) that caters primarily to domestic consumption. GLP’s 4,000 customers include some of the world’s most dynamic manufacturers, retailers and third party logistics companies. GLP’s US$37 billion fund management platform is a key area of growth going forward.
GLP is listed on the Mainboard of Singapore Exchange Securities Trading Limited (SGX stock code: MC0.SI; Reuters ticker: GLPL.SI; Bloomberg ticker: GLP SP).
GLP Investor Relations & Media Contact:
Ambika Goel, CFA
SVP- Capital Markets and Investor Relations
Tel: +65 6643 6372
Email: agoel@glprop.com
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