New U.S. Industrial Fund to Spend $1.5 Billion
- Dec 27, 2016
Chicago—GLP, a Singapore-based global provider of logistics facilities and the second largest owner and operator in the United States, is once again firmly focused on the U.S., establishing a new fund that plans to invest $1.5 billion over three years.
GLP US Incomes Partners III will be seeded with a $1.1 billion portfolio from Hillwood. The first part of the deal is closing this month with the purchase of a $700 million portfolio from Hillwood that was announced in September. The remaining $400 million of identified pipeline assets from Hillwood, a Dallas-based development firm that develops and acquires industrial properties across North America and Europe, will be acquired in phases upon completion and lease-up. GLP, as the asset manager of the fund, will also make another $400 million in acquisitions that satisfy the fund’s investment criteria.
GLP said the fund has total equity commitments of $620 million from six leading global institutional investors from the U.S., Asia and Middle East, which own 90 percent of the fund. As the asset manager, GLP will own the remaining 10 percent.
This is GLP’s third industrial acquisition in the U.S., where it is now the second largest logistics property owner and operator with a footprint of about 173 million square feet, putting it behind San Francisco-based Prologis. Worldwide, GLP owns and operates a 561-million-square-foot portfolio and is the largest provider of modern logistics facilities in China, Japan and Brazil. GLP’s $39 billion fund management platform is a key area of growth going forward, both globally and in the U.S.
“Our U.S. fund management platform continues to perform strongly. Capital raising for our third U.S. fund exceeded our expectations,” CEO Ming Mei said in a prepared statement. “We saw strong support from new and existing institutional investors, which is testament to our strong track record as an asset manager and strong investor demand for high quality U.S. logistics real estate.”
M3 Capital Partners Ltd. is acting as financial advisor to GLP in connection with the formation of GLP US Income Partners III.
The Hillwood portfolio has properties in the Chicago, Los Angeles, Dallas, Atlanta, Cincinnati, Indianapolis and Pennsylvania markets. The Chicago market, at 24 percent, has the most leased square footage in the GLP-Hillwood deal, followed by Dallas at 23 percent. GLP had previously noted that online retail represents 42 percent of the businesses that lease space in the Hillwood portfolio followed by retail, 19 percent; food and beverage, 12 percent; and home improvement at 11 percent. Amazon is one of the top customers by leasing area along with Starbucks, NFI, Williams Sonoma and Wayfair.
In September, GLP described the properties as “desirable locations expected to benefit strongly from the growth of e-commerce in the U.S.”
GLP entered the U.S. industrial market in December 2104, when it took a 55 percent stake in a deal with GIC, Singapore’s sovereign wealth fund to buy IndCor Properties from Blackstone for $8.1 billion. The firm followed up in July 2015 with a $4.6 billion purchase of a 58 million-square foot industrial portfolio from Industrial Income Trust, one of the biggest M&A deals of 2015.