GLOBAL Logistic Properties Limited (GLP) on Tuesday announced the formation of GLP Brazil Income Partners II (GLP BIP II) and the expansion of GLP Brazil Development Partners I (GLP BDP I).
The modern logistics-facilities provider said its fund-management platform in Brazil grew 68 per cent from US$1.5 billion to US$3.7 billion, bringing the total assets under fund management to US$12.6 billion.
In March, GLP had entered into an agreement to acquire a portfolio of Brazil assets from BR Properties S.A., with the stated intention of injecting the portfolio into its fund-management platform.
GLP BIP II comprises about 896,000 sq m of high-quality logistics assets located mainly in São Paulo and Rio de Janeiro.
Following Tuesday's announcement, GLP said it will hold a 40 per cent stake in GLP BIP II, with the Canada Pension Plan Investment Board and an unnamed leading North American institutional investor each taking about a 30 per cent stake.
GLP said it will remain the asset manager of the BRL2.5 billion (US$1.1 billion) portfolio, with sole responsibility of the day-to-day operations.
Meanwhile, GLP BDP I grew by 36 per cent or US$0.4 billion to BRL3.6 billion (US$1.5 billion).
The company said the additional capital will be used to acquire a strategically-positioned land parcel in Rio de Janeiro.
It added that the project will be developed in phases, with the first phase expected to commence in FY2017.
The total development cost is estimated at BRL615 million (US$257 million).
GLP owns 40 per cent of GLP BDP I, with the Canada Pension Plan Investment Board holding 39.6 per cent, and Singapore's sovereign fund GIC, 20.4 per cent.
GLP is expected to receive net cash proceeds of approximately BRL926 million (US$388 million) from the transfer of assets into GLP BIP II. These are expected to be recycled into developments in Brazil over time.
The company said that while the sales consideration of BRL2.5 billion is consistent with GLP's acquisition price, it is expected to recognise a foreign exchange loss of approximately US$24.6 million in the second-quarter of FY2015, as a result of currency depreciation.