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GLP And GIC’s US$8.1b Push Into US Logistics
Aspire, Hot Picks | 17 December 2014
By: Raymond Leung
Articles (142) Profile

Analysts updates on GLP

Global Logistic Properties (GLP) will co-invest with GIC to acquire one of the largest logistic real estate portfolios, IndCor Properties in the US. The sellers are funds affiliated with Blackstone Real Estate Partners VI & VII which will receive a sale consideration of US$8.1 billion.

IndCor Properties consists of approximately 117 million square feet of high-quality industrial properties in key market throughout the US. This acquisition will instantly place GLP as the third largest player in the US logistics space by lease area.

The portfolio is spread across 36 submarkets with an occupancy rate of 90 percent and is expected to reach 95 percent in near term.

Initially, GLP will hold a 55 percent stake while GIC will hold a 45 percent stake in the investment. GLP intends to sell down its holding to 10 percent by August 2015 and has already received strong interest from its capital partners.

The initial payment for this investment will be funded through a combination of cash and short-term credit facilities. GLP’s final 10 percent stake will be worth US$330 million which will be approximately 4 percent of GLP’s net asset value.

GLP expects this investment to bring its total asset under management value to US$21.3 billion, a 61 percent increase.

This investment will also generate a pre-tax cash-on-cash yield of 9 percent in the first year which comprises its share of operating profit and fund management fees.

Macquarie Research reiterated their “Buy” call towards the counter with a potential upside of 30.4 percent. They cited the positive effect of the US investment and its direct proxy into China’s growing logistic sector as the main reasons for the rating.

Trained in fund management, Raymond is familiar with shares and various investment vehicles.

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