GLP sets up US$620m fund, completes US$1.1b US acquisition

MAINBOARD-LISTED warehouse provider Global Logistic Properties (GLP) has announced the establishment of a US$620 million fund that is expected to invest US$1.5 billion over three years, a day after it completed an US$1.1 billion acquisition of US properties.

Named GLP US Income Partners III, the fund has secured US$620 million in equity commitments. Six global institutional investors from Asia, the US and Middle East have committed for a stake of about 90 per cent, GLP said in a release on Thursday morning.

GLP, which counts Singapore sovereign wealth fund GIC as its largest shareholder, is the asset manager and will retain a stake of about 10 per cent post-syndication.

The fund will be used to hold a newly acquired US$1.1 billion logistics portfolio from Dallas-based developer Hillwood in a deal that was completed on Wednesday.

New Harvest Holdings, LLC, GLP's indirect wholly-owned subsidiary, is a limited partner of the fund, with about 9.7 per cent of the fund's aggregate capital commitments.

An initial US$700 million from this portfolio will be acquired in December 2016, with a further US$400 million of identified pipeline assets to be acquired in phases.

As asset manager, GLP has a US$400 million mandate for acquisitions in the US that satisfy the fund's investment criteria.

This transaction is immediately accretive to GLP, with its roughly 10 per cent equity stake of US$60 million expected to generate a 13 per cent return-on-equity in the first year of investment.

GLP's counter closed on Wednesday at S$2.22, some 0.45 per cent or one Singapore cent lower.