With logistics and warehousing becoming more important in the fast-paced retail environment, a global perspective requires enhanced efficiency.
Global Logistic Properties, a global provider of modern logistics facilities, has entered into a definitive agreement to acquire Gazeley, a developer, owner and operator of logistics facilities in Europe, for roughly $2.8 billion.
GLP, based in Singapore, said the transaction positions the company to have one of the highest quality portfolios in Europe, as well as an experienced local management team with a strong development track record. The company’s customers include Adidas, Procter & Gamble, Amazon, H&M, Walmart, JD.com, FedEx and DHL.
“We have been looking to expand to Europe and this portfolio presents an attractive entry point given the quality and location of the assets,” Ming Z. Mei, co-founder and chief executive officer of GLP, said. “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.”
GLP intends to inject the Gazeley portfolio into its fund management platform, in line with previous practice. Investor demand to partner with GLP in the European logistics market is strong and the company said it is already in negotiations with interested capital partners.
The company said it will also retain the existing management team and the Gazeley brand. The Gazeley management team averages 19 years of experience managing and developing logistics real estate, with five offices across Europe.
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The 32 million-square-feet acquisition portfolio is concentrated in Europe’s key logistics markets, namely the U.K., Germany, France and the Netherlands. It comprises 17 million square feet of existing assets, which are 98 percent leased with a weighted lease expiry of nine years, and a development pipeline of 16 million square feet of buildable area.
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About 60 percent of existing assets have been built within the last five years and 85 percent of the development pipeline is focused in the U.K., one of Europe’s most land-constrained markets, GLP noted.
Nesta Investment Holdings Ltd., which has offered to privatize GLP, supports the entry into Europe as part of the long-term strategy to expand its fund management platform. The companies do not expect the Europe entry to impact the timeline of the proposed privatization of GLP.
The transaction is expected to be funded by roughly $1.6 billion of equity and $1.2 billion of long-term, low-cost debt. GLP will fund its equity commitment with cash on hand, existing credit facilities and new indebtedness.
Through its network of strategically located properties and ecosystem partners, GLP offers space and integrated solutions to customers. The company is also one of the world’s largest real estate fund managers, with assets under management of approximately $39 billion.