GLP makes $277m Japan logistics exit

Just a year after closing its $500 million Japan Income Partners I joint venture fund, GLP has sold seven of its properties to its J-REIT for a 46 percent IRR.

Global Logistic Properties (GLP), the Singapore-listed logistics developer-cum-fund manager, has completed its first exit out of one of its more recent Japan joint ventures.

It has sold seven logistics properties to its own GLP J-REIT in a deal valued at ¥27.5 billion (€208 million; $277 million), according to a firm statement.

GLP Japan Income Partners I is a $500 million joint venture between GLP, China’s sovereign wealth fund China Investment Corporation (CIC) and advisory firm CBRE. The fund acquired a total of 15 properties from Chicago-based real estate investment management firm LaSalle Investment Management in February 2012, valued at about $1.6 billion altogether.

The sale was conducted through an auction, and is expected to be completed this month. The net proceeds from the sale are expected to be ¥9 billion, giving the joint venture a 46 percent levered IRR. GLP plans to reinvest its share of the proceeds to maintain its 15 percent stake in the J-REIT and in its development projects in Japan, China and Brazil.

The 2 million square foot portfolio, concentrated in greater Tokyo and greater Osaka, is 100 percent leased to seven tenants on long-term fixed leases. The addition of these properties will bring the GLP J-REIT’s assets under management to $2.6 billion, while GLP Japan Income Partners I will still have 6.3 million square feet of properties worth about $1.32 billion.

With about $16.2 billion funds under management, GLP manages a portfolio of logistics properties totaling about 230 million square feet across 66 cities in China, Japan and Brazil. Most of the firm’s investment vehicles have been joint ventures with institutional investors including GIC Private, the Canadian Pension Plan Investment Board and CIC. However, the firm also recently launched its first China fund targeting as much as $1.5 billion, which appears to adhere to more of a commingled structure, PERE reported earlier.