GLP sells stake in $1.6bn Japan portfolio to CBRE Global

CBRE Global Investors’ multi manager platform buys GLP out of a 16.7% stake in a $1.6bn Japan logistics portfolio it bought with Chinese sovereign wealth fund CIC last year.

Singapore-listed logistics property heavyweight Global Logistics Properties (GLP) has sold a 16.7 percent stake in a large logistics property portfolio in Japan to the multi-manager division of the world’s largest real estate investment manager, CBRE Global Investors.

According to an announcement by GLP, CBRE Global Multi Manager has acquired a stake in the 15-property portfolio, called GLP-JLP, for ¥7.6 billion (€75.3 million; $98 million). The deal sees CBRE Global forge a partnership not only with GLP but China’s preeminent sovereign wealth fund, China Investment Corporation, which owns 50 percent.

GLP originally entered exclusive talks to buy the portfolio from the first Japanese logistics fund managed by Chicago-based LaSalle Investment Management last July. Then, in December as the deal was completing, GLP announced that CIC was to assume a 50 percent position. The partners paid $1.6 billion for the portfolio with each partner injecting $272.9 million of equity into the deal.

GLP stated at the time of closing the original purchase that its equity position could reduce over time. Following the stake sale to CBRE Global, its stake is 33.3 percent. GLP will remain the asset manager of the portfolio with sole responsibility for its day to day operations.

The portfolio, which includes properties predominantly from the greater Tokyo area but also Osaka, comprises 8.3 million square feet. As of September 30, the occupancy rate of the properties was 98.9 percent with an average unexpired lease of 5.2 years.

Jeff Schwartz, deputy chairman of GLP said the sale to CBRE Global was in line with its goal of recycling capital from existing equity investments in Japan. Nonetheless, he said: “We remain focused on further building our fund management platform and driving higher returns for our shareholders.” GLP is more than 50 percent owned by Singapore’s sovereign wealth fund, Government of Singapore Investment Corporation.

CBRE Global made its investment on behalf of separate account clients and one of its funds, believed to be its Global Alpha Core Fund.

Jeremy Plummer, chief executive officer of CBRE Global Multi Manager, said: “Japan is an attractive logistics market, with strong demand and a limited supply of modern facilities. This transaction provides us with the opportunity to partner with GLP, Asia’s market leader in modern logistics facilities, and gives our clients access to a high-quality portfolio with a strong tenant profile and stable cash flow.”

GLP was advised by M3 Capital Partners.