Global Logistic Properties Ltd. rose to a record after the unit of Singapore’s sovereign wealth fund said it plans to raise 209 billion yen ($2.6 billion) from the sale of its Japanese warehouses.
Global Logistic increased 1.5 percent to S$2.70 at the close of trading in Singapore, its highest level since listing in 2010. The gain added to the 54 percent advance this year, compared with the 15 percent increase in the benchmark Straits Times Index.
The company, known as GLP, will sell 30 of its 68 Japanese logistic facilities to a real estate investment trust that it will partly own and manage, it said in a statement yesterday. The sale will help in GLP’s strategy of “recycling capital to fund expansion in high-growth markets and growing our strong fund management platform,” Jeffrey Schwartz, deputy chairman of GLP, said in the statement to the Singapore exchange.
“This potential event could provide a few value propositions,” which include enhanced asset management, a platform for GLP to realize its mid-term asset-management value and capital recycling from the deployment of proceeds to China and Japan, Donald Chua and Lee Syn Yi, Singapore-based analysts at CIMB Research Pte, said in a note to clients today.
The J-REIT, as the real estate investment trusts are known in Japan, will be able to buy an additional three properties over the next three years, according to GLP’s statement. The REIT will be granted a “right of first look” over the remaining 38 properties for a period of 10 years, GLP said.
“It monetizes a considerable proportion of our portfolio and will generate stable recurring income for the group, diversifying our earnings base,” Schwartz said.
The Tokyo Stock Exchange REIT Index has climbed 28 percent this year, compared with the 3.2 percent gain in the broader Topix index.
GLP has operations in seven locations in Japan with a combined net asset value of $3.93 billion. It has properties in 29 cities in China with a net asset value of $3.65 billion as of June 30, it said. In December last year, the company teamed up with China Investment Corp. to buy 15 Japanese warehouses for 122.6 billion yen from LaSalle Investment Management.
GLP, a unit of Government of Singapore Investment Corp., raised S$3.5 billion ($2.8 billion) in October 2010 in what was at the time Singapore’s biggest IPO since 1993. The company reported a 57 percent increase in profit to $153 million in its fiscal first quarter ended June, it said on Aug. 14. It will report second quarter earnings on Nov. 14.