Singaporean sovereign wealth fund GIC has teamed up with RPT Realty and two other investors to invest over $1.2bn (€997bn) to buy US net lease retail assets.
GIC, RPT, Zimmer Partners and Monarch Alternative Capital have formed the core net lease retail real estate platform and have committed to funding $470m worth of acquisitions over the next three years.
NYSE-listed RPT, which owns a portfolio of open-air US shopping destinations, has seeded the newly created platform with an initial investment portfolio of 42 single-tenant assets valued at $151m.
RPT said it will retain a 6.4% stake in the platform and will invest up to $70m in preferred equity that will be a component of Zimmer and Monarch’s equity commitment.
According to RPT, the platform has so far received commitments for a $175m secured credit facility.
The platform expects to close on the syndication of the facility this month, it said, adding that the facility will include an accordion feature that allows the platform to increase future potential commitments up to a total capacity of $500m.
”The platform will target the acquisition of over $1.2bn of strategic assets, creating a scalable, stable-growth investment platform,” RPT said.
Brian Harper, president and CEO of RPT Realty, said: “We believe the current dislocation in the open-air retail sector compared to the triple-net lease sector has created unique investment opportunities based on our extensive analysis.
“Retail is a prime driver of the US economy, whether delivered through ‘brick and mortar’ or online, and both require a strong infrastructure to drive results.”
The current market disruption has further highlighted the need to service the entire retail distribution chain without regard to the specific form of distribution, Harper said.
Lee Kok Sun, real estate CIO at GIC, said, “As a long-term investor, we believe there are opportunities in the retail net lease sector to acquire high-quality assets with strong tenant credit at attractive pricing.
“We expect to create value in identifying pricing inefficiencies between different tenant and property types within the retail sector.”
Steven Frankel, principal and head of real estate at Zimmer Partners, said: “The current retail real estate environment is fast-moving and at an important crossroads.
“We chose to partner with RPT because of their commitment to operational excellence and demonstrated ability to capitalize on strategic opportunities. We are excited about the possibilities.”
Ian Glastein, managing principal at Monarch Alternative Capital, said: “Given significant dislocations throughout the market and strong underlying investment merits of the platform, we believe that formation of this partnership is an ideal way for Monarch to continue to strategically invest in the retail real estate sector.
“We look forward to contributing our opportunistic, credit and structuring expertise to help generate strong returns for our partnership.”
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