Global Logistics Provider(or GLP), the leading global provider of modern logistics facilities part-owned by Singapore’s sovereign-wealth fund, is set to acquire a $1.1 billion worth US logistics portfolio from Hillwood Development Company. The move facilitates its aggressive efforts to expand in U.S. over the last two years as the rise of online shopping drives up the values of distribution centers. GLP will be the asset manager and expects to retain a stake of approximately 10% post-syndication. The US$1.1 billion transaction is expected to be funded by US$470 million of equity and US$635 million of debt. Chuck Sullivan, President and Chief Operating Officer of GLP US said,
The portfolio being acquired from Hillwood is one of the highest quality logistics real estate portfolios in the US. This transaction, which will be immediately accretive to GLP, demonstrates our ability to leverage our existing platform to pursue enhanced network benefits in the strongest US markets.
The acquisition solidifies GLP’s position as the second largest owner and operator of logistics facilities in the US with no additional overhead. The initial closing portfolio of US$700 million is 100% leased with a weighted average lease expiry of 9 years. A further US$400 million of development assets shall be acquired in phases upon completion and full lease-up.
The acquisition structure of the development assets integrates a set of stringent lease-up metrics which lock in long-term tenants for GLP while eliminating lease-up risk. This transaction widens GLP’s footprint in the US to 187 million sq ft. GLP is the second largest logistics property owner and operator in the US and the largest in China, Japan and Brazil.
GLP owns and operates a global portfolio of 52 million square meters (560 million square feet) that caters primarily to domestic consumption. Its 4,000 customers include some of the world’s most dynamic manufacturers, retailers and third party logistics companies.