GLP agrees to buy $1.5b US logistics portfolio

A GLP asset in Miami. GLP says it has agreed to buy a portfolio with a strong concentration in places which it expects to benefit strongly from e-commerce growth in the US. The deal will increase the number of buildings in GLP's portfolio by 32 to 1,
A GLP asset in Miami. GLP says it has agreed to buy a portfolio with a strong concentration in places which it expects to benefit strongly from e-commerce growth in the US. The deal will increase the number of buildings in GLP's portfolio by 32 to 1,434.PHOTO: GLOBAL LOGISTIC PROPERTIES

Deal with firm founded by billionaire Ross Perot's son will make it second-largest logistics facility operator in US

Singapore-listed Global Logistic Properties (GLP) will become the second-largest owner and operator of logistics facilities in the United States after a US$1.1 billion (S$1.5 billion) acquisition.

GLP has agreed to acquire a US logistics portfolio from Hillwood Development, a firm founded by the eldest son of billionaire Texas businessman and former US presidential candidate Ross Perot.

Hillwood, a premier property developer in the US, was founded by Mr Ross Perot Jr.

His father is the most successful independent US presidential candidate of recent times and was credited by some with the 1992 defeat of Republican incumbent George H.W. Bush and the victory of Democratic candidate Bill Clinton.

In a statement yesterday, GLP said the 15 million sq ft portfolio to be acquired has a strong concentration in locations which it expects to benefit strongly from the growth of e-commerce in the US.

The acquired assets include facilities in Atlanta, Chicago and Los Angeles, while the biggest customers in the US by leased area include Amazon, Home Depot and FedEx.

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The portfolio being acquired from Hillwood is one of the highest-quality logistics real estate portfolios in the US.

MR CHUCK SULLIVAN, chief operating officer of GLP US.

"The portfolio being acquired from Hillwood is one of the highest-quality logistics real estate portfolios in the US," said Mr Chuck Sullivan, president and chief operating officer of GLP 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 company also said in a presentation to investors that it expects rising demand for industrial real estate, because of growing trade, output and employment levels.

The acquisition will increase the number of buildings in the company's portfolio by 32 to 1,434.

The deal will take place in phases, with the acquisition of a US$700 million part of the portfolio in December. This includes 10 million sq ft of newly built logistics facilities, which are completely occupied. The tenants are mainly firms of investment-grade credit or public companies.

The remaining US$400 million part of the portfolio, which includes 5 million sq ft of logistics facilities, will be acquired in phases upon completion and full lease-up.

The deal will be funded with a mix of equity and debt.

GLP will become the second- largest logistics property owner and operator in the US after Prologis, and the largest in China, Japan and Brazil.

Yesterday, GLP's share price fell four cents to close at $1.82 after the deal was announced.

A version of this article appeared in the print edition of The Straits Times on September 14, 2016, with the headline 'GLP agrees to buy $1.5b US logistics portfolio'. Print Edition | Subscribe