Global Logistic Properties, the provider of modern logistics facilities, will contribute 30 of its properties in Japan to a real estate investment corporation (J-REIT), which will be focused on owning and operating logistics facilities in Japan.
The initial consideration for the contribution will be JPY 209 billion ($3.2 billion), in line with the appraised value of the properties. This agreement is consistent with GLP’s strategies to recycle capital in order to create and enhance shareholder value and to grow its fund management platform in Japan.
Net cash proceeds from the sale, after paying all outstanding borrowings and tenant deposits are estimated to be approximately JPY 100 billion, which GLP intends to use primarily for investment in China and Japan.
As sole sponsor, GLP will act as the property and asset manager of the J-REIT. Accordingly, GLP will receive asset and property management fees, as well as fees arising from the subsequent acquisition and disposition of properties. GLP will also have an interest in the J-REIT, under which it will receive additional recurring distribution income.
The 30 properties being contributed to the J-REIT have attributable net profits of US$102 million, representing around 23.1% of GLP’s consolidated net profits. This excludes incremental asset and property management fees and dividend income which will be earned by GLP.
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