Global Logistic Properties Ltd., a unit of Singapore’s sovereign wealth fund, will buy assets in Brazil for 2.9 billion real ($1.4 billion) with its parent, Canada Pension Plan Investment Board and China Investment Corp.
The company, known as GLP and manages warehouses, will set up two joint ventures with Government of Singapore Investment Corp., the Canadian retirement fund and China’s sovereign fund to purchase logistic facilities from Brazil’s Prosperitas, GLP said in a statement through the stock exchange. GLP will act as the asset manager of the acquired properties, 88 percent of which will be located in Sao Paulo and Rio de Janeiro, according to the statement.
GLP is expanding its assets to profit from rising consumption and affluence in Brazil that is leading to increased demand for distribution facilities. The two ventures will together own 39 properties in the country that recorded an average 4 percent growth in gross domestic product over the last seven years, adding to its existing assets in China and Japan, the company said.
Brazil is “an attractive market with strong fundamentals and compelling opportunities for growth,” Chief Executive Officer Ming Z. Mei said in the statement. “We remain mindful of the global economic conditions, but are confident that our unrivaled market presence in China, Japan and now Brazil positions us well for future growth.”
With the acquisitions in Brazil, GLP’s assets will almost triple to $7.2 billion from $2.6 billion and create additional recurring cash flow streams in the form of income and dividends, Jeffrey Schwartz, deputy chairman of GLP, said on a conference call in Singapore.
The first venture includes 34 properties and one project under development, where GLP and CIC will each hold a 34 percent stake, it said. The second has five development projects, which will be jointly owned by GLP, Canada Pension and GIC, it said.
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 CIC to buy 15 Japanese warehouses for 122.6 billion yen ($1.5 billion) from LaSalle Investment Management.
GLP said earlier today it’s raising about 104.8 billion yen through an initial public offering that is poised to be Japan’s second-biggest this year.
The company will sell 1.75 million shares in the sale and seeks to list in Tokyo on Dec. 21, according to a document filed with the country’s stock exchange. The final IPO price will be set on Dec. 12, according to the document.
GLP said on Nov. 1 it intended to raise 209 billion yen from selling 30 of its 68 Japanese logistic facilities to a real estate investment trust that it will partly own and manage. The REIT will be able to buy an additional three properties over the next three years, and will be granted a “right of first look” over the remaining 38 properties for a period of 10 years, the company said at the time.
The company also said today its second-quarter profit declined 3.1 percent to $194.5 million from $200.7 million. Sales rose 25 percent to $172.9 million.
Shares of Global Logistic, or GLP, have surged 55 percent this year, outperforming the 14 percent gain in the benchmark Straits Times Index. The stock, which was halted for trading today, closed at S$2.72 on Nov. 12.