Singapore’s GLP raises capital to fund acquisition of 3 logistics facilities in China that cover major supply chains

The GLP China real estate investment trust (C-Reit) issued 438 million shares at a price of 4.228 yuan per unit
Leasing activity of logistics assets in mainland China picked up in the first three months of the year, according to CBRE

China property

Cheryl Arcibal

Published: 9:15pm, 6 Jun 2023

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Singapore-based GLP Group has raised 1.8 billion yuan (US$260 million) of fresh capital in a follow-on equity offering to help fund its acquisition of three logistics assets in mainland China, according to a company statement.

The GLP China real estate investment trust (C-Reit) successfully completed the capital-raising activity, issuing 438 million shares at a price of 4.228 yuan per unit, at the top end of an initial range provided, according to the statement on Tuesday.

“Proceeds will be used to acquire three logistics facilities – GLP Park Qingdao Qianwan Port, GLP Park Jiangmen Heshan and GLP Chongqing Urban Distribution Logistics Centre, expanding GLP C-Reit’s portfolio to comprise 10 modern logistics assets with a total leasable area of 1.16 million square metres,” the company said.

“All assets are strategically located in China’s core logistics hubs to support regional supply chains. These include the Beijing-Tianbei-Hebei region, Yangtze River Delta, Guangdong-Hong Kong-Macau Greater Bay Area and Chengdu-Chongqing Economic Circle,” it added.

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GLP C-Reit was among the first batch of Reits approved in China in 2021. The company’s bet on the segment comes amid a mixed outlook for the asset class in China.

Leasing activity of logistics assets in mainland China picked up in the first three months of the year, specifically in the cities of Beijing, Foshan and Dongguan, according to a report released last month by property consultancy CBRE.

In the coming months, CBRE said that leasing would be driven by “domestic demand-related occupiers and the manufacturing sector”.

However, “massive new stock” was scheduled to come on stream in the second quarter”, providing more options to occupiers in eastern, southern and northern China. However, supply will be limited in the west of the country, according to CBRE.

GLP’s latest investment in China comes on the heels of an announcement last month that it will acquire three properties in Japan and a 30 per cent stake in Alfalink Sagamihara 4 for a total consideration of 58.2 billion yen (US$416 million). The funds for the acquisition will be raised through a global equity offering of 30.9 billion yen, the company said.

With operations across Brazil, China, Europe, India, Japan, the US and Vietnam, GLP has about US$125 billion in total assets under management in real estate and private equity.