Asia’s biggest warehouse operator, Global Logistic Properties, agreed to acquire European logistics platform Gazeley for about US$2.8 billion, marking its first push into Europe and underscoring consolidation in the buoyant sector.
In a statement on Monday, GLP said the properties, owned by funds affiliated with Canada’s Brookfield Asset Management, were spread across four countries and comprised 32 million square feet (3.0 million square metres) of total gross leasable area.
Singapore-listed GLP, which has a US$42 billion portfolio of assets across China, Japan, Brazil and the United States, is benefiting from rising demand for logistics facilities driven by a boom in e-commerce from clients such as Amazon.com Inc and JD.com Inc.
“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 Mei, co-founder and CEO of GLP, said, adding that the purchase was part of the company’s long-term strategy to expand its fund management business.
The acquisition portfolio was concentrated in Europe’s key logistics markets, with 57 percent in the United Kingdom, 25 percent in Germany, 14 percent in France and the remainder in the Netherlands, GLP said.
In June, U.S. private equity firm Blackstone Group agreed to sell European warehouse business Logicor to China Investment Corp for 12.25 billion euros (US$14.4 billion) in the biggest private equity real estate deal in Europe on record.
GLP is in the process of being taken over for S$16 billion (US$11.8 billion) by a leading Chinese private equity consortium backed by senior executives from GLP, marking Asia’s largest PE buyout. Property developer China Vanke Co is part of the group.
GLP said the transaction is expected to be funded by about US$1.6 billion of equity and US$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. The company does not need to issue additional equity to fund this acquisition,” it said.
The logistics company said it intends to inject the Gazeley portfolio into its fund management platform. “Investor demand to partner with GLP in the European logistics market is strong and the company is already in negotiations with interested capital partners.”
In Monday’s statement, the consortium taking over GLP said it supports GLP’s entry into Europe. It did not expect the move to affect the timeline for taking the company private.
Update: Toronto-based Brookfield acquired Gazeley in 2013 from an affiliate of Dubai World.
Reporting by Anshuman Daga; Editing by Richard Pullin
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
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