Singapore-listed Global Logistic Properties (GLP) has completed the acquisition of European logistics group Gazeley for around $2.8 bn (€2.4 bn).
In conjunction with the deal GLP - which is being privatised following its acquisition by Chinese private equity firms and the state-owned Bank of China in July of this year - has launched two new funds and increased the size of its fund management platform by $4.0 bn (€3.4 bn) to $43 bn.
The funds are GLP Europe Income Partners I (GLP EIP I), which comprises a €1.7 bn portfolio of Gazeley’s operating assets across the UK, Germany, France and the Netherlands, and GLP Europe Development Partners I (GLP EDP I), a development venture expected to reach €1.7 bn when fully leveraged and invested. GLP EDP I is seeded with land to support 1.4 million m2 of buildable area.
Demand from institutional investors to partner with GLP in Europe outstrips the amount available for investment, GLP said. As of completion, co-investors have funded around 24% of capital contributions alongside GLP, and GLP expects to syndicate roughly 85% of the operation by April 2018.
Aside from Gazeley, GLP is the owner of 55 million m2 of logistics space in Asia and the US.
Gazeley buy
GLP first announced in October that it was to acquire Gazeley with the stated intention of injecting the €2.4 bn portfolio into its fund management platform.
Owner Brookfield appointed Morgan Stanley as well as CBRE earlier this year to handle the sale of Gazeley with a price tag of around €1.7 bn.
The deal marked the Asian investor's entry into Europe. GLP had previously tried to buy P3 but was beaten to the punch by Singapore's sovereign wealth fund GIC.
Steve Schutte, Chief Operating Officer of GLP, admitted the company had been exploring the European marekt for a while. 'This acquisition is the right fit for our business model at the right time. GLP’s strategy is to grow the fund management platform, while expanding our global footprint. We are committed to a long-term growth strategy in Europe and are excited to be further building on the Gazeley brand.'
GLP intends to retain the existing management team and the Gazeley brand. Following the deal Nick Cook, the current COO of Gazeley, will be stepping into the role of President & CEO of Gazeley, having been with the company for nearly 15 years.
Pat McGillycuddy, the current CEO and one of the founding members of Gazeley, will become non-executive chairman of Gazeley after 30 years of service.
Gazeley's portfolio encompasses 3 million m2 concentrated in Europe’s key logistics markets, namely the UK (57%), Germany (25%), France (14%) and the Netherlands (4%). It comprises 1.6 million m2 of existing assets, which are 98% leased with a weighted lease expiry of nine years, and a development pipeline of 1.4 million m2 buildable area.
About 60% of existing assets have been built within the last five years and 85% of the development pipeline is focused in the UK.
The deal marks the third-largest this year in the booming European logistics sector after CIC's acquisition of Logicor. In June, Blackstone confirmed the sale of its European logistics platform, Logicor, to China Investment Corporation (CIC), for €12.25 bn - the largest real estate investment transaction ever in Europe.
In January, Singapore's GIC completed the purchase of P3, the pan-European owner, developer and manager of logistics properties, from TPG Real Estate and Ivanhoé Cambridge for €2.4 bn.
