Singapore Fund Asks US Warehouse Operator To Consider Strategic Review

03-Dec-2016 Intellasia | WSJ | 6:00 AM Print This Post

Global Logistic Properties, the second-biggest owner of warehouses in the US, enlists J.P. Morgan

Global Logistic Properties Ltd said Thursday it is undertaking a strategic review, a move that could lead to a sale of the $7 billion firm that is the second-biggest owner of warehouses in the US

Singapore-listed GLP said that it has hired J.P. Morgan Chase & Co. to undertake the review following a request from its largest shareholder, a unit of Singapore’s $344 billion sovereign-wealth fund GIC Pte. Ltd The Singaporean sovereign fund owns 37 percent of GLP, which has a $7 billion market capitalisation, and a possible sale of its stake would trigger a mandatory offer for all of the company’s shares under Singapore’s takeover rules.

GLP has grown into one of the world’s biggest logistics companies through a series of acquisitions with backing from the Singaporean sovereign fund and other institutional investors. Demand for sophisticated logistics operations has grown on the back of the expansion of e-commerce globally and GLP has targeted the US and China, the two biggest online shopping markets for its expansion. It manages logistics assets worth close to $40 billion across the US, China, Japan, and Brazil.

GLP has been one of the market’s biggest buyers in recent years for logistics assets with a particular focus on the US and China. In late 2014, it made its biggest investment in the US by paying $8.1 billion to Blackstone Group LP for a collection of US warehouse and logistics properties called IndCor. In September of this year, it added to those holdings by purchasing a $1.1 billion portfolio of US warehouses from Hillwood Development Co.

These acquisitions have made GLP the second-largest owner of warehouses in the US after San Francisco-based real-estate investment trust Prologis Inc.

GLP has been aggressively expanding in the US over the last two years, as the rise of online shopping drives up the values of distribution centers.

In China, GLP manages $12.8 billion worth of assets including facilities in top-tier cities including Beijing, Shanghai, and Suzhou.

“As part of the strategic review, the company, through J.P. Morgan, is in the process of making preliminary approaches to various parties to evaluate the viability of options available for its business,” GLP said in a filing to the Singapore stock exchange.

GLP’s statement said that no “definite transaction” has been entered into with any party and that there was no assurance that any transaction will result from the strategic review.

GIC, the biggest shareholder in the logistics company, is one of the world’s biggest sovereign funds and has parked more than one-third of its investments in the US It owns stakes in Citigroup Inc. and UBS Group AG. According to the Sovereign Wealth Fund Institute, GIC oversees about $344 billion in assets, making it the world’s eighth-largest sovereign fund.


Category: Singapore

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