Global Logistic Properties Ltd., an operator of warehouses near seaport hubs, said it submitted a bid to buy LaSalle Investment Management’s Japan holdings that include more than 20 industrial and warehouse buildings.
The company plans to make the acquisition through a “fund structure” with one or more institutional investors, it said in a statement to the Singapore exchange today, responding to media reports it’s paying S$2.1 billion ($1.7 billion) for the assets.
Global Logistic said on May 30 that it’s on the lookout for acquisitions in Japan as it expects the economy to rebound after the nation’s worst earthquake on March 11 and anticipates its 46 trillion yen ($570 billion) industry will benefit as more companies cut costs and farm out more logistics services.
“Property prices should be lower after the earthquake, but it’ll still need to look at specific terms they end up with,” said Peter Bai Hongwei, a Beijing-based property analyst at China International Capital Corp. “GLP has a very high operation rate in the Japan market, I’m not surprised they are making the acquisition to increase their growth rather than simply relying on rental.”
The Singapore-based Global Logistics is also seeking new tenants in Japan that may move out of older, non-earthquake resistant warehouses to its newer buildings, it said in the statement. Japan made up more than 80 percent of its revenue and pretax earnings in the year ended March, it said.
Global Logistic shares rose 0.5 percent to S$2.08 as of 9:58 a.m. in Singapore, paring the decline this year to 3.7 percent, compared with the 2.2 percent drop in the Bloomberg Asia Pacific Real Estate Index
Global Logistic is among the companies that are in close competition for the LaSalle assets worth 140 billion yen, which would make it the biggest property deal in Japan in two years, the Wall Street Journal reported yesterday, citing people familiar with the transaction.
The company also took a $42.1 million loss in the value of its assets in Japan after the earthquake, it said in the May statement. The warehouse operator also said a day after the temblor that the buildings that were damaged made up less than 1 percent of the value of its properties in Japan.
Global Logistic, which is partly owned by Government of Singapore Investment Corp., the city-state’s sovereign wealth fund, raised S$3.9 billion in October in Singapore’s biggest initial public offering since 1993.