Global Logistic Properties has completed the acquisition of a $4.55 billion logistics portfolio in the US from Industrial Income Trust (IIT), a Denver-based national industrial real estate investment trust (REIT), by forming a partnership with the Chinese state-owned insurance group China Life Insurance and two other global institutional investors.
With this transaction, the Singapore-based firm has catapulted into becoming the second largest logistics property owner and operator in the US, with a 175 million square foot logistics footprint in the country.
The country-wide logistics portfolio has been acquired for $1.9 billion in equity.
In a statement released today, the firm announced the launch of a new vehicle, GLP
Income Partners II, into which the portfolio has been injected. China Life Insurance and two other global institutional investors, whose names were not disclosed, have invested a total of $1.3 billion in equity via the fund.
GLP declined to disclose the specific amount invested by each investor. However, according to a report in the Wall Street Journal, China Life Insurance has invested more than $1 billion for a 30 percent interest in the fund.
The remaining equity has been invested by GLP. The firm did however add in the statement that it is currently in negotiations to bring additional investors into the fund. By April next year, it expects to pare down its stake in the fund to 10 percent or $190 million in equity.
The agreement to acquire the 58 million square feet portfolio at a 5.6 percent cap rate was signed by GLP in July this year. The $1.9 billion investment was initially funded by cash on hand and GLP’s existing credit facilities, led by plans to eventually bring in other partners and reduce its stake by April next year.
The firm has been able to raise a bulk of the capital in less than six months after announcing the agreement.
“Investor demand to partner with us on this portfolio is strong and we are very pleased to complete this acquisition together with three leading global institutional investors,” said Ming Z. Mei, chief executive officer, GLP. “The transaction is in line with our growth strategy of expanding into the best logistics markets internationally via our fund management platform.”
The class A logistics portfolio is spread across 20 major markets in the US. Given that 97 percent of the portfolio overlaps with the firm’s existing warehouse platform in the US, the firm further added that it “expects to see significant synergies which will lead to improved operating performance between the two portfolios and enhanced customer relationships globally.”
GLP owns a 115 million square feet logistics portfolio across 29 US markets that it acquired in partnership with GIC Private from The Blackstone Group in December last year by setting up GLP Income Partners I. The total equity invested by GLP and GIC in the fund was $3.2 billion, but GLP is now believed to be looking to sell part of its stake to three other equity investors.