This article is sponsored by GLP
What have been the key events for your firm over the past 12 months?
In June we announced the sale of an $18.7 billion portfolio of US logistics real estate assets to Blackstone, which was the largest private real estate transaction in history. When we entered the US market, four-and-a-half years ago, people questioned whether it was the right decision given the maturity of the market and the dominant players. This sale confirmed our decision at the time and demonstrates the ability of our team to use its investment and operations expertise to build the most valuable logistics portfolio in the industry.
We also made a big commitment in acquiring half of China Merchants Capital group, which was transformative in helping us to expand our investment scope further into infrastructure, finance and private equity. Additionally, we raised $9 billion of logistics real estate funds in 2019, including establishing a $5.6 billion Japan development fund and a $2.1 billion China income fund.
What has the operating environment been like in that time?
There remains very strong demand from around the world for logistics real estate, which has helped us expand our partnerships with new and existing investors. The underlying markets we operate in continue to be healthy, even in Brazil, whose instability prevented investors from entering the market, and last year we signed record new leases for the third year running. There has also been sustained leasing momentum in China, Europe and Japan and we will continue to invest in the US.
What key challenges did you have to overcome?
Logistics is one of the most attractive real estate sectors, so a lot of managers have raised a lot of capital. The biggest challenge across the world has been to make sure we keep a disciplined approach.
Attracting and retaining talent is important because logistics real estate is such a hot sector. You have to get the basics right and reward performance with market competitive pay, but it is our culture which attracts the right team – we give them the autonomy to make decisions on the ground in their market, without bureaucracy from a global company getting in the way.
Our investment in technology is an important differentiator. We can use our global scale and data-driven insights to be forward thinking and anticipate future trends. We started investing in tech five years ago, before proptech became a buzzword, and have since raised tech PE funds. I believe technology will continue to impact the real estate sector in general and logistics in particular and will be important to create efficiencies in the business.
Advances in sorting equipment and smart gates for example will improve warehouse capacity and change how the facility will be designed. We’re only at the tip of the iceberg with technology, but it’s a conviction for us. You might find it hard to believe, but approximately 15 percent of our employees are in technology related positions.
Who or what is mainly responsible for your success?
Our success and growth as a global investment firm can be attributed to the hard work and dedication of our team. I’m very proud that GLP, despite the size the company has grown to, is still very entrepreneurial. We still think like a small company and we do not let bureaucracy build up.
Our executive committee is based across the world and locally relevant to each individual market they serve. That combination of global and local gives us the ability to transfer knowledge and share insights from different markets to build a stronger global business and create the most value for our investors.