China Life Among GLP’s Partners on $4.55B Logistics Portfolio

By Gail Kalinoski, Contributing Editor

Ming Z. Mei, GLP CEO

Singapore-based GLP partnered with three leading global investors, including China Life Insurance Co., to complete the $4.55 billion acquisition of a U.S. logistics portfolio from Industrial Income Trust Inc. and expects to add more investors by April.

GLP, a leading global provider of logistics facilities, established GLP US Income Partners II with China Life and two unidentified institutional investors, for the acquisition of the 58 million-square-foot industrial portfolio from the Denver-based REIT. The deal, announced in July, now doubles GLP’s presence in the United States and makes it the second largest owner of U.S. industrial real estate. GLP said in July it planned to pare down its ownership to 10 percent by April and it is on its way with its first three partners already on board.

“Investor demand to partner with us on this portfolio is strong and we are very pleased to complete this acquisition together with three leading global institutional investors,” Ming Z. Mei, GLP CEO, said in a prepared statement. “This transaction is in line with our growth strategy of expanding into the best logistics markets internationally via our Fund Management Platform.”

The Wall Street Journal reported that China Life had paid more than $1 billion for a stake of about 30 percent in the portfolio deal. GLP would only say that China Life and the two other investors now owned 66 percent of GLP US Income Partners II.

GLP will be the asset manager of the Class A, state-of-the-art portfolio that has properties in 20 major markets, including logistics and transportation hubs in Arizona, California, Florida, Georgia, New Jersey, Pennsylvania, Texas and the metropolitan Washington, D.C. region. Most of the portfolio overlaps with GLP’s existing U.S. platform so it expects to see significant synergies between its portfolios, which will lead to improved operating performance and enhanced customer relationships, according to the company statement.

The company made its first foray into U.S. commercial real estate nearly a year ago when it purchased a 55 percent stake in a deal with GIC to buy IndCor Properties from Blackstone for $8.1 billion. That portfolio has 117 million square feet of industrial and logistics properties. The amount GLP paid to GIC, Singapore’s sovereign wealth fund, was not disclosed.

With both portfolios under its belt, GLP’s U.S. footprint has expanded to about 173 million square feet, putting it behind U.S. leader Prologis Inc. as the second largest logistics property owner and operator. GLP, which has a total portfolio valued at $33 billion, is also the largest provider of modern logistics facilities in China, Japan and Brazil.

In an exclusive interview this summer with Commercial Property Executive, Stephen Schutte, GLP’s chief operating officer, said the initial focus would be on integrating the platforms and increasing the lease ratios as well as acquiring additional capital partners. Schutte said GLP was attracted to the U.S. logistics market because of its strong growth. He said limited supply and high demand had positioned the market for sustained rent and occupancy.

China Life is not the only Chinese insurance company to focus on U.S. commercial real estate, particularly the logistics market. Ping An Insurance Group partnered with SunCap Property Group and Blumberg Investment Partners to make a $600 million investment in a logistics portfolio of high-quality, net-leased real estate assets across the U.S. The joint venture said it could make another $400 million in future investments.