GLP to raise S$1.5b from Japan REIT

Asia’s largest logistic facilities provider, Global Logistics Properties (GLP), will contribute 30 properties in Japan to set up a real estate investment corporation in Japan (J-REIT).

The properties are worth US$2.6 billion (S$3.2 billion) and GLP expects to raise a net US$1.3 billion (S$1.6 billion) from the sale of the assets.

In a statement on Thursday, GLP says the proceeds will be used primarily for investment in China and Japan.

“This is a very significant transaction for GLP. It is consistent with several key elements of our strategy, recycling capital to fund expansion in high-growth markets and growing our strong fund management platform,” said Jeffrey Schwartz, deputy chairman of GLP.

He adds that “the transaction will drive long term shareholder value as it monetises a considerable proportion of our portfolio and will generate stable recurring income for the Group, diversifying our earnings base.”

As sole sponsor, GLP will act as the property and asset manager of the J-REIT.

GLP says it will hold an interest in the J-REIT, but has not specified the potential size of its stake.

The 30 properties to be contributed to the J-REIT have attributable net profits of around US$102 million (S$124.5 million), representing approximately 23 percent of GLP’s consolidated net profits for the year ending 31st March 2012.

GLP is 50.6 percent-owned by the Government of Singapore Investment Corporation.

In Japan, GLP currently has 68 wholly-owned logistics facilities and an additional 15 that are owned in a joint venture.

The announcement was made after the close of trading on the Singapore Exchange.

On Thursday, GLP shares ended up 3.5 percent at S$2.66.

Source : Channel NewsAsia – 1 Nov 2012

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