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GLP expands to US via $8.1bn IndCor deal

The Singapore-listed logistics real estate investment and development firm has expanded to the US by buying the majority share of the IndCor business from Blackstone.

Singapore-listed logistics real estate investment and development firm Global Logistic Properties (GLP) has broken into the US market via GIC Private’s $8.1 billion acquisition of a country-wide property portfolio, the firm announced today.

GLP was originally formed via the takeover of rival US industrial giant ProLogis’ China and Japan assets shortly after the global financial crisis in 2008, with backing from the city-state sovereign wealth fund. It then spread its operation to Brazil in 2012.

This expansion into the US consolidates further its stature as global powerhouse in the world of logistic real estate investment and is expected also to intensify its challenge to ProLogis, still the world’s largest logistics real estate business, and to Australia’s Goodman, which entered the US market in 2012.

GLP said the deal provided it with immediate scale in the world’s largest economy and logistics market, as well as a local and experienced management team. It brings the firm’s overall assets under management to 290 million square feet.

The investment is in 117 million square feet of logistics space across 36 US markets that is 90 percent leased. The seller of the assets was New York-based private equity real estate giant The Blackstone Group. The assets will be held in a fund called GLP US Income Partners I.

The deal sees GLP commit 55 percent of the equity of the investment initially, funded via a combination of cash and a short-term credit facility, with GIC accounting for the other 45 percent.
However, the firm said it had received strong indicative interest from other capital partners to invest in the portfolio and subsequently it planned to syndicate down its holding to 10 percent by next August, which would reflect a $330 million equity position.

GLP also said the deal would increase its fund management platform by 61 percent to $21.3 billion.

The strategic announcement comes just weeks after the death of GLP’s co-founder Jeff Schwartz although it is understood that he played a major part in putting the transaction together.

Ming Mei, who co-founded GLP alongside Schwartz, 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.”

He added: “Investor interest for GLP US Income Partners I is strong and we remain confident of completing the fund syndication by August 2015.”

However, despite its significance, Mei warned that China would remain its growth market and that “GLP will continue to focus on executing our expansion plans in China, Japan and Brazil, while also growing our fund management platform.”