GLP Continued Capital Recycling Strategy with Further Asset Sales
GLP will sell four properties in Japan to GLP JREIT for JPY42.7 billion (US$420 million). The sale price is 3% higher than latest appraisal values2 and equates to a weighted average cap rate of 4.8%.
- GLP to sell four Japan properties to GLP J-REIT for JPY42.7bn (US$420m)
- Transaction expected to be completed in September 2016
- GLP to realize cash profit of US$130 million from Japan asset sales YTD
Tokyo, 16 August 2016 – GLP, the leading global provider of modern logistics facilities, will sell four properties in Japan to GLP J-REIT for JPY42.7 billion (US$420 million1). The sale price is 3% higher than latest appraisal values2 and equates to a weighted average cap rate of 4.8%.
This transaction3 follows the sale of GLP‘s 50% share of GLP・MFLP Ichikawa Shiohama to GLP J-REIT announced in June 2016. GLP expects to realize US$130 million of cash profit from these dispositions upon completion in September 2016. This includes the crystallization of US$100 million of development profit (GLP share, pre-tax) from three development projects – GLP Atsugi II, GLP Yoshimi and GLP・MFLP Ichikawa Shiohama – which are 100% leased and generated a development profit margin of 44%.
Mr. Ming Z. Mei, Chief Executive Officer of GLP, said: “This transaction demonstrates how GLP is able to leverage its fund management platform to unlock value and generate the best possible returns. Looking ahead, we will continue our capital recycling strategy to achieve dual aims of crystallizing development profit and growing fund management AUM to generate higher recurring income from management fees.”
The dispositions of these five assets generated a net levered property IRR of 27% (before fees and promotes). Net sale proceeds for GLP are estimated to be approximately JPY26 billion (US$254 million), which GLP plans to reinvest into development in Japan.
China and Japan represent the most attractive markets for development. GLP will deploy the majority of its capital to these two markets while focusing on being the best operator. GLP’s US$37 billion fund management platform provides a recurring source of income that is growing consistently every year. It is also one of GLP’s main sources of capital to fund growth. GLP will continue exercising strong financial discipline including leveraging the fund management platform for strategic expansion.
GLP J-REIT, listed on the Tokyo Stock Exchange in December 2012, is a real estate investment trust focused on operating logistics properties in Japan. GLP is the property and asset manager of the J-REIT. GLP J-REIT has the right of first look on a further 17 properties (US$2.0 billion) wholly owned by GLP.
APPENDIX
1 Unless stated, all exchange rates are reported as 1 USD = JPY 101.66, the closing exchange rate as of 2 August 2016
2 Appraisals commissioned by GLP and performed on the basis of desktop valuations. The book value and appraisal value of the assets as of 30 June 2016 was JPY 41.5 billion (US$408 million)
3 This transaction falls under the category of “non-discloseable transactions” for the purpose of Chapter 10 of the SGX-ST Listing Manual
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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