Global Logistic Properties Ltd., partly owned by Singapore’s sovereign wealth fund, is in preliminary talks to acquire more than 200 warehouses valued at about $4.5 billion as part of its push into the U.S., said a person with knowledge of the discussions.
The talks with the owner of the properties, Industrial Income Trust Inc., might not lead to an agreement, said the person, who asked not to be identified because the sales process is private. The assets comprise almost 58 million square feet (5.4 million square meters).
GLP “has not entered into any binding contractual agreement in this regard,” the Singapore-based company said in a statement Wednesday. Industrial Income, a nontraded real estate investment trust based in Denver, didn’t return telephone calls seeking comment. GLP’s interest was first reported late Tuesday by Real Estate Alert, a trade newsletter.
U.S. warehouses are attracting domestic and international investors as Web commerce helps drive demand for storing and distributing goods. In the past month, Prologis Inc. teamed with Norway’s sovereign wealth fund to buy about 60 million square feet of U.S. warehouses and related assets for $5.9 billion.
“There’s an amazing amount of capital chasing U.S. industrial assets,” said Eric Frankel, an analyst at real estate research firm Green Street Advisors LLC. “Property prices have never been higher and that certainly encourages sellers.”
Vacancy rates at U.S. warehouses are at their lowest level in the past 15 years, Frankel said.
GLP entered the U.S. warehouse market in February, with the $8.1 billion acquisition of IndCor Properties Inc. from Blackstone Group LP. GLP Chief Executive Officer Ming Mei said in a May 14 interview that the company is seeking to double the assets it manages in the U.S.
A deal for Industrial Income’s assets would cement GLP’s standing as the No. 2 operator of U.S. warehouse properties, after Prologis. GLP bought IndCor in partnership with GIC Pte, Singapore’s sovereign wealth fund.
GLP has since moved to reduce its IndCor stake to 10 percent from 55 percent by offering part of its interest to other investors. It continues to operate the properties.
“GLP is skilled at raising third-party capital to fund acquisitions,” Frankel said. “I would guess they would do something similar with this deal.”
GLP manages about 115 million square feet in the U.S. that’s about 92 percent occupied. Including properties in China, Japan and Brazil, the company oversaw more than 440 million square feet as of March 31.