GLP in talks to buy S$6b of US industrial property: Source

SINGAPORE — Global Logistic Properties (GLP), partly owned by Singapore sovereign wealth fund GIC, is in talks to acquire more than 200 warehouses in the United States valued at about US$4.5 billion (S$6.06 billion) as part of its push to expand in the world’s largest economy, a person with knowledge of the discussions said yesterday.

The talks with the owner of the properties, Industrial Income Trust, are preliminary and might not lead to an agreement, said the source, who asked not to be identified because the sales process is private. The assets under discussion total almost 58 million sq ft, the source added.

GLP has not entered into any binding contractual agreement, the logistics giant said in a regulatory filing with the Singapore Exchange yesterday.

“As part of its continuing and ongoing efforts to strengthen its strategic position and financial performance, it reviews and assesses potential investment opportunities from time to time, including potential acquisitions of properties that may be beneficial to the group’s financial performance,” it added in the filing.

Industrial Income, a non-traded real estate investment trust based in Denver, did not return calls seeking comment.

US warehouses are attracting domestic and international investors as web commerce helps drive demand for storing and distributing goods.

In the past month, the largest US industrial landlord, Prologis, teamed with Norway’s sovereign wealth fund to buy about 60 million sq ft of US warehouse space and related assets for US$5.9 billion.

“There’s an amazing amount of capital chasing US industrial assets. Property prices have never been higher and that certainly encourages sellers,” said Mr Eric Frankel, an analyst at real estate research firm Green Street Advisors. Vacancy rates at US warehouses are at their lowest level in the past 15 years, he added.

GLP stormed into the US warehouse market in February, joining hands with GIC to purchase IndCor Properties from the financial services giant Blackstone Group for US$8.1 billion. GLP chief executive officer Ming Mei said last month that the company is seeking to double the assets it manages in the US.

A successful deal for Industrial Income’s assets would cement GLP’s standing as the No 2 operator of US warehouse properties, after Prologis.

GLP manages about 115 million sq ft in the US that is about 92 per cent occupied. Including properties in China, Japan and Brazil, the company managed more than 440 million sq ft as of March 31. BLOOMBERG