SHANGHAI, July 21, 2015 /PRNewswire/ -- GLP, the leading global provider of modern logistics facilities, today announced the establishment of the largest China-focused logistics infrastructure fund, CLF II ("the Fund"). Seven leading global institutions, including some of the world's largest national pension and sovereign wealth funds, are investing alongside GLP to develop modern logistics facilities in China. US$3.7 billion of equity has been committed to the Fund by GLP and investors, with leverage allowing for an investment capacity of US$7 billion to develop 13 million square meters ("sqm") (140 million square feet ("sq ft")) over four years. GLP China is the manager and holds a 56% stake in CLF II.
China is GLP's primary market for development with development starts growing at 30% per annum. CLF II is more than double the size of CLF I (US$3 billion) given the size of the market opportunity and strong demand from investors. The offering was significantly oversubscribed and provides long-term capital that enables GLP to strengthen its network effect, better serve customers and de-risk its development pipeline. Fees and promotes earned on partners' capital enhance GLP's returns by 400-500 basis points[1].
Mr. Ming Z. Mei, Chief Executive Officer of GLP said, "Building on the strong performance of CLF I, the successful closing of CLF II reflects the confidence of institutional investors in GLP's proven track record as an operator, developer and fund manager. China remains our primary market for development. The fund management platform is an important source of capital for GLP and we remain focused on leveraging it to scale our business effectively while driving higher risk-adjusted returns."
CLF II will be GLP's exclusive vehicle for new, wholly owned logistics development projects in China. The Fund expects to start acquiring land later this year and commence construction of new developments in April 2016. CLF II carries a similar investment mandate as CLF I, GLP's first China development fund which was launched in November 2013 and has reached its investment capacity.
Both CLF I and CLF II seek to capture the significant opportunities arising from the shortage of modern logistics infrastructure in China. Demand for modern warehouse facilities is driven by growing domestic consumption, urbanization and the growth in e-commerce. GLP has a strong track record of developing in China. Its portfolio has grown at a 61% compound annual growth rate over the last decade, and today encompasses 11.8 million sqm (127 million sq ft) of completed facilities. This transaction will build upon the company's market-leading position, with on-the-ground execution by one of the best teams in the industry.
With CLF II, GLP's fund management platform expands 36% to US$27.1 billion. Five of the Fund investors are from Asia, one from North America and one from the Middle East. Of the seven, four investors are partners in CLF I and two are new to GLP's fund management platform. GLP's fund management platform is scalable and has grown at an annual rate of 95% since FY12.
M3 Capital Partners (HK) Limited served as exclusive financial advisor to GLP in connection with the formation of the Fund.
[1] Potential fees and promotes based on the AUM and fee structure of GLP's existing development funds. Promotes assume all requisite triggers are satisfied and not discounted. No assurance can be provided that these assumptions may materialize.
About GLP (www.glprop.com)
GLP is a leading global provider of modern logistics facilities. As of 31 March 2015, GLP's US$28 billion property portfolio encompasses 41 million square meters (441 million square feet) of logistics facilities across China, Japan, Brazil and the United States.
GLP remains focused on being the best operator in each of its markets, creating value through developments and expanding its fund management platform. GLP's customers include some of the world's most dynamic manufacturers, retailers and third party logistics companies. Domestic consumption is a key driver of demand for GLP.
The Group is listed on the Mainboard of Singapore Exchange Securities Trading Limited (SGX stock code: MC0.SI; Reuters ticker: GLPL.SI; Bloomberg ticker: GLP SP).
GLP Investor Relations & Media Contact:
Ambika Goel, CFA
SVP- Capital Markets and Investor Relations
Tel: +65 6643 6372
Email: agoel@glprop.com
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