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MAINBOARD-LISTED Global Logistic Properties (GLP) plans to sell its 50 per cent share of GLP-MFLP Ichikawa Shiohama to GLP J-Reit for 15.5 billion yen (S$208 million).
The transaction is being done at a capitalisation rate of 4.5 per cent, the company said. Capitalisation rate is a real estate valuation measure used to compare different real estate investments. The sale crystallises 4.9 billion yen of development profit for GLP, representing a 46 per cent development profit margin.
GLP's disposal generates a net levered property internal rate of return of 23 per cent (before fees) since construction began in December 2012.
The sale price is in line with the latest appraisal value as at end-March 2016 and the transaction is expected to be completed in September 2016.
The deal will generate net sale proceeds for GLP of some 7.9 billion yen, which the global provider of modern logistics facilities plans to reinvest into development in Japan.
GLP-MFLP Ichikawa Shiohama is a 50:50 joint venture project with Mitsui Fudosan, located along the Tokyo Bay Area, about 15km from the city centre. The 122,000-square-metre property was completed in January 2014 and is fully leased to leading global retailers such as Rakuten, H&M and Forever 21.
GLP J-Reit was listed on the Tokyo Stock Exchange in December 2012 and is a real estate investment trust (Reit) focused on operating logistics properties in Japan. GLP is the property and asset manager of the J-Reit.
GLP J-Reit has the right of first look on a further 20 properties worth US$2.2 billion wholly owned by GLP.
GLP shares rose two Singapore cents or 1.1 per cent to S$1.80 at 2.50pm on Thursday.