GLP to invest $4.6bn in US for acquiring 200 warehouses

Global Logistic Properties (GLP) is acquiring a US$4.55 billion (S$6.2 billion) portfolio in the United States, it announced yesterday.

In its second American acquisition this year, GLP will purchase assets that comprise 58 million sq ft (5.4 million sqm) in 20 major markets, including Los Angeles, Washington and Pennsylvania, GLP said yesterday.

“We’re focusing on continuing to grow this asset, improve the lease-up ratios and increase the cash yield”, Mei said in a telephone interview Wednesday.

SINGAPORE, July 31 Global Logistic Properties Ltd (GLP) on Friday booked a 49 percent rise in first-quarter profit on rising asset values and income from an expanded fund management platform, but cut its China warehouse development goal due to market uncertainty.

“We are positive as this will further boost its funds management platform”, Tricia Song, a Singapore-based analyst at Barclays Plc, said in a note to clients. With both portfolios, GLP’s U.S. footprint will expand to 173 million square feet, putting it behind U.S. industrial leader Prologis Inc.

It was 93 per cent leased as at June 30, with a weighted average lease expiry of almost 51/2 years.

“The fund syndication offering for our first US income fund was significantly oversubscribed”.

IIT purchased its first property in June 2010 and through 2013 raised approximately $2.2 billion of equity capital from investors. The firm said in its prepared statement that demand from major institutional investors – both new and existing capital partners – looking to invest with GLP in U.S. industrial real estate is strong. The deal was done jointly with Singaporean sovereign wealth fund GIC Pte, GLP’s largest shareholder, with about 35 percent of the company.

GLP chief operating officer Stephen Schutte said: “This transaction complements our existing portfolio well, expanding GLP’s size and scale in the US”.

The latest portfolio addition comes at a 5.6 per cent capitalisation rate, GLP said.

“With vacancies down to 15-year lows, in time we will see even greater rental growth”, he said.

“It also (helps to give) their portfolio a more balanced split between emerging and developed markets, as they have been growing in China and Brazil while slowly selling down their Japan business to their Japan Reit”, said Mr Wong Yew Kiang, senior research analyst at CLSA.