SINGAPORE: Singaporean warehouse manager Global Logistic Properties announced on Thursday it has launched a $1.5 billion fund to invest in logistics properties in the U.S. Called GLP US Income Partners III, it is the company’s third fund for U.S. warehouses. Six institutional investors from Asia, the U.S. and the Middle East have already committed to take approximately 90% stake in the fund. Two are new investors in GLP’s fund management platforms. GLP will hold the remaining 10% after syndication.
Of the $1.5 billion, $1.1 billion will be used to acquire a 1.4-million-sq.-meter warehouse portfolio from Hillwood Development in a deal that was announced in September. The initial acquisition of $700 million was completed this month, and the remainder will be purchased in phases once the properties are leased out to tenants. The remaining $400 million will be used to acquire other properties in the U.S. over the next three years.
GLP CEO Ming Mei said in a statement on Thursday that the fund’s backing by institutional investors is a “testament to our strong track record and strong investor demand” for logistics properties in the U.S. In a previous interview with Nikkei, Mei said the company is seeing “strong demand from pensions and sovereign wealth funds” to add investments in U.S. warehouses, as upside in rental fees can be expected from lease renewals.
Since entering the U.S. warehouse market in 2015, GLP has made several multibillion dollar acquisitions there, making it the second-largest logistics property provider in the U.S. after Prologis. Aside from its operations in the U.S., GLP develops and manages modern large-scale logistics facilities in Japan, Brazil and its main market, China. But with China’s economy slowing, the company has been expanding its exposure in the U.S., where demand for modern warehouses is growing in line with the expansion of the e-commerce industry.
GLP’s shares have been trending higher since November, following a Bloomberg report that a group of Chinese companies, including Chinese sovereign wealth fund China Investment Corp., are in talks to make a joint offer to take over GLP. GLP’s shares ended trading at 2.20 Singapore dollars ($1.53) on Thursday, down 0.9% from Wednesday’s close but up 23% from the closing price on Nov. 1.
The Singaporean company’s shares gained further momentum on Dec. 1 after the company announced it is undertaking “an independent strategic review” with JP Morgan following a request from its largest shareholder, Singaporean sovereign wealth fund GIC. In a filing to Singapore Exchange, the company said it is “in the process of making preliminary approaches to various parties to evaluate the viability of options available for business.” In a Dec. 2 report, OCBC Investment Research lead analyst Eli Lee described the strategic review as “a positive development” but cautioned against speculating on the near-term sale of GLP.
