GLP Continues to Grow Fund Management Platform; Expands Global Network to The United States

GLP Continues to Grow Fund Management Platform; Expands Global Network to The United States

GLP is co-investing with GIC to acquire one of the largest logistics real estate portfolios in the US for US$8.1 billion. This transaction provides immediate scale in the US, the world’s largest economy and logistics market, as well as an experienced local management team that further strengthens GLP’s team.

  • GLP co-investing with GIC to acquire US$8.1 billion US logistics portfolio
  • GLP plans to syndicate ownership from 55% initially to 10% by August 2015; GLP has received strong indicative interest from other capital partners
  • GLP’s organizational structure ready to support this new market entry; Experienced local management company further strengthens GLP’s team
  • Transaction is expected to be accretive to earnings and enhance ROE longer-term; GLP’s fund management platform grows 61% to US$21.3 billion

 

Singapore, 8 December 2014– Global Logistic Properties Limited (“GLP”), the leading provider of modern logistics facilities in China, Japan and Brazil, is co-investing with GIC to acquire one of the largest logistics real estate portfolios in the US for US$8.1 billion1. This transaction provides immediate scale in the US, the world’s largest economy and logistics market, as well as an experienced local management team that further strengthens GLP’s team. GLP continues its strategy of expansion into the best logistics markets internationally via its best-in-class fund management platform.
 

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.
 

The Company’s organizational structure is ready to support this new market entry. The existing local management team is very experienced and further strengthens the GLP team. GLP’s fund management business enables GLP to scale its business efficiently while delivering superior risk-adjusted returns.

Accretive Transaction; Significant Boost to Fund Management Platform

Following this transaction, GLP’s fund management platform will grow by 61% to US$21.3 billion.
 

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 year2. This includes GLP’s share of operating results and fund management fees.
 

Mr. 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.”

High Quality Portfolio with Embedded Growth

GLP US Income Partners I comprises 117 million square feet (11 million square meters) of total gross floor area spread across 36 major sub-markets in the US. GLP is acquiring the US$8.1 billion portfolio at a significant discount to replacement cost.
 

The portfolio is 90% leased as of 30 September 2014, with a weighted average lease expiry of 3.2 years. In-place rents are estimated to be approximately 7% below market. GLP is focused on increasing the lease ratio in the near-term. Increasing rents and occupancy provide potential for upside.
 

The US industrial real estate market has been experiencing solid growth recently, with the last 18 consecutive quarters yielding positive net absorption. Lack of construction over the past five years has led to limited new supply of 0.4% of total stock per year. There is stable demand for logistics infrastructure driven by continued growth in retail and e-commerce sales which are growing faster than GDP.

Conference Call/Webcast Information

A briefing for investors and analysts is scheduled on Monday, 8 December 2014 at 9:00am Singapore time. Please dial +65 6723 9381 to join the briefing (passcode: 44269827) or visit our website (ir.glprop.com) to access our webcast for the event. A replay of the briefing will also be available on our website.

About Global Logistic Properties (www.glprop.com)

Global Logistic Properties Limited (“GLP”) is a leading global provider of modern logistics facilities with a market-leading presence in China, Japan, Brazil and USA. The Company develops, owns and manages a 27 million square meters (290 million square feet) portfolio of logistics facilities that cater to growing domestic consumption. GLP’s customers include some of the world’s most dynamic manufacturers, retailers and third party logistics companies. Fund management is an important and growing part of GLP’s business, providing significant capital to support sustainable long-term growth, while enhancing returns on GLP’s invested capital. As of 30 September 2014, the Company’s total assets amounted to US$20 billion.
 

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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1 Subject to post-closing adjustments

2 Determined on a pre-tax basis using, among other things, estimates of fund management fees and rental income.