Global Logistic Properties has confirmed its €2.4bn (£2.1bn) purchase of the European arm of Brookfield’s IDI Gazeley, as revealed by EG.
The Singaporean-listed firm fought off competition from Schroders, which had been working with Japan’s Mitsubishi, and Blackstone.
The purchase of Gazeley by the largest owner of warehouses in Asia sees the company achieve its long-held ambition of having a major presence in Europe and a truly global platform. Gazeley will sit alongside its existing 600.6m sq ft portfolio across China, Japan, the US and Brazil.
Gazeley is to be subsumed within GLP’s fund management platform meaning the equity in the firm will be syndicated and no new equity will need to be raised in order to complete the transaction, which is due to complete in December. GLP has had “strong indicative demand from institutional investors” to partner up for the purchase and is already in negotiations with interested parties. It is to be funded using €1.4bn of equity and €1bn of debt, reflecting a loan-to-value of 41.7%.
GLP intends to retain the existing Gazeley management team, which is led by Pat McGillycuddy, and operates from five offices.
Ming Mei, co-founder and chief executive of GLP, said: “We have been looking to expand to Europe and this portfolio presents an attractive entry point given the quality and location of the assets. This transaction adds a premier operational and development platform for us in Europe and is part of our long-term strategy to expand our fund management business.”
The Gazeley portfolio includes 17m sq ft portfolio of standing assets and a 16m sq ft development pipeline. The existing assets have an average unexpired lease length of nine years and are 98% let. Around 60% have been built within the last five years.
By value the UK accounts for 57% of the portfolio, made up of 2.5m sq ft of existing assets and an 11.3m sq ft pipeline. Germany makes up 25% of the portfolio, including 7.3m sq ft of existing assets and 2.7m sq ft pipeline. French assets account for 14% of the portfolio, of which 5.1m sq ft are standing of assets with a 1.5m sq ft pipeline. The 2.3m sq ft of assets in the Netherlands make up 4% of the portfolio.
GLP itself is in the process of being taken private by a Chinese consortium led by Mei including Hopu Investment Management, Hillhouse Capital Group and Vanke. That deal, which is due to complete by April next year, will not be impacted by the Gazeley takeover.
CBRE and Morgan Stanley are acting for Brookfield. JLL is acting for GLP.
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