CHICAGO /PRNewswire/
-- GLP, the leading global provider of modern logistics facilities,
has entered into a definitive agreement to acquire
a US$4.55
billion[2] US logistics portfolio from Industrial Income
Trust ("IIT"). GLP intends to inject the portfolio into its fund
management platform.
Expanding GLP's Fund
Management Platform
GLP
expects to own 100% of the portfolio upon closing
by 16
November 2015 and pare down its stake to 10%
byApril
2016. Demand from major institutional investors to invest
with GLP in US logistics real estate is strong, with GLP in
negotiations with several new and existing capital partners.
Transaction Generates
Attractive Returns
The
portfolio is to be acquired at a 5.6%[3] cap rate. GLP's target 10%
equity stake of US$190
million is expected to generate compelling returns
within the first year of investment. This includes GLP's share of
operating results and fund management fees.
Mr. Ming
Z. Mei, Chief Executive Officer of GLP, said: "This is an
accretive opportunity for GLP that allows us to strengthen our US
market presence and growth prospects with minimal incremental
overhead. The fund management platform is one of GLP's main sources
of capital to fund our growth. The fund syndication offering for
our first US income fund was significantly oversubscribed. Building
on the positive momentum, we remain confident of injecting this
portfolio into our fund management platform by April
2016."
Funding
GLP's
initial equity commitment (100% ownership day one)
of US$1.9
billion[4] will
be funded by cash on hand and existing credit facilities. GLP does
not need to issue additional equity to fund this acquisition given
GLP has US$2.3
billion of existing cash. GLP has
approximately US$2.9
billion of committed long-term financing (~60% LTV) for
the acquisition. Post this transaction, the US would represent
6%[5] of
GLP's Net Asset Value.
GLP Becomes Second Largest
Logistics Property Owner and Operator in the US
The
portfolio, selectively aggregated through over 100 separate
transactions over a period of five years, is one of the highest
quality portfolios in the US. It comprises 58 million square feet
("sq ft") (5.4 million square meters ("sqm")) of state-of-the-art,
in-fill logistics assets spread across 20 major markets. The
largest markets include Los
Angeles, Metro D.C. and Pennsylvania.
The portfolio was 93% leased as of 30
June 2015, with a weighted average lease expiry of nearly
5.5 years. GLP is focused on increasing the lease ratio to 95%.
This transaction
will enlarge GLP's US footprint by 50% to 173 million sq ft (16.1
million sqm), with GLP becoming the second largest logistics
property owner and operator in the US within a year of market
entry. GLP is also the largest provider of modern logistics
facilities in China, Japan and Brazil.
Subsequent to this transaction, GLP's global portfolio will
encompass more than 500 million sq ft (47 million sqm) valued at
approximately US$33
billion[6].
Mr. Stephen
Schutte, Chief Operating Officer of GLP, said: "This
transaction complements our existing portfolio well, expanding
GLP's size and scale in the US. We feel particularly good about the
quality and location of the facilities, which have an
average building age of 15 years and a strong
concentration in major distribution markets. We are excited about
the synergies the combined portfolio is expected to generate and
see upside potential from increasing occupancy and rents."
About GLP
(www.glprop.com)
GLP is the leading global
provider of modern logistics facilities. Its growth strategy is
centered on being the best operator, creating value through
developments and expanding its fund management platform. GLP's
customers include some of the world's most dynamic manufacturers,
retailers and third party logistics companies.
In July
2015, GLP entered into a definitive agreement to acquire
a US$4.55
billion US logistics portfolio from Industrial Income
Trust, with the intention of injecting the portfolio into its fund
management platform. Upon closing of the proposed acquisition of
IIT, GLP's U.S. footprint would expand to 173 million square feet
(16.1 million square meters). Subsequent to this transaction, GLP's
global portfolio would encompass more than 500 million square feet
(47 million square meters) and approximately US$33
billion of assets under management worldwide. The Group
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: [email protected]
This press release is not
an offer of securities for sale or a solicitation of an offer to
purchase securities. The information in this press release may not
contain, and you may not rely on this press release as providing,
all material information concerning the condition (financial or
other), earnings, business affairs, business prospects, properties
or results of operations of GLP or its subsidiaries. Please refer
to our unaudited financial statements for a complete report of our
financial performance and position. This release may contain
forward-looking statements that involve risks and uncertainties.
Forward-looking statements include statements regarding the intent,
belief and current expectations of GLP or its officers with respect
to various matters. When used in this press release, the words
"expects," "believes," "anticipates," "plans," "may," "will,"
"should," "intends," "foresees," "estimates," "projects," and
similar expressions, and the negatives thereof, are intended to
identify forward-looking statements. Similarly, statements that
describe objectives, plans or goals also are forward-looking
statements. Actual future performance, outcomes and results may
differ materially from those expressed in forward-looking
statements as a result of a number of risks, uncertainties and
assumptions. Representative examples of these factors include
(without limitation) general industry and economic conditions,
interest rate trends, cost of capital and capital availability,
availability of real estate properties, competition from other
companies and venues for the sale/distribution of goods and
services, shifts in customer demands, customers and partners,
changes in operating expenses, including employee wages, benefits
and training, governmental and public policy changes, and the
continued availability of financing in the amounts and the terms
necessary to support future business. You are cautioned not to
place undue reliance on these forward-looking statements, which are
based on the current view of management on future events and speak
only as of the date of this press release. GLP does not undertake
to revise forward-looking statements to reflect future events or
circumstances. No assurance can be given that future events will
occur, that projections will be achieved, or that GLP's assumptions
are correct.
[1]
Year
one cash NOI yield based on purchase price
[2]
Subject
to transaction costs
[3]
Year
one cash NOI yield based on purchase price
[4]
Includes
estimated transaction costs
[5]
Pro-forma
NAV assuming GLP's 10% equity stake in both GLP US Income Partners
I (in contract) and Industrial Income Trust portfolio (under
negotiation)
[6]
Pro-forma
portfolio valuation based on GLP's reported financials as of 31
March 2015