GCP Sells 13 Brazilian Logistics Assets for $313M Following Ares Deal

GLP Capital Partners (GCP), the investment management arm of Asian warehouse specialist GLP, has completed the sale of 13 logistics assets in Brazil to an industrial REIT managed by Brazilian financial services firm BTG Pactual for BRL 1.77 billion ($313 million).

The properties span a combined 542,000 square metres (5.8 million square feet) of gross leasable area and are predominantly located within a 60 kilometre (37 mile) radius of Sao Paulo, as well as in the states of Pernambuco and Rio de Janeiro, GCP said in a release on Thursday.

“We are committed to generating value for our investors by maximising returns through capital recycling,” said Mauro Dias, president of GCP in Brazil. “The sale of these assets demonstrates the quality of our investment platform and our ability to acquire, manage, and enhance the value of our asset portfolio.”

The transaction comes just over a week after US private equity firm Ares Management agreed to buy GCP’s business outside of Greater China for $3.7 billion, with that ex-China carveout known as GCP International comprising the Singapore-based fund manager’s operations in Japan, Vietnam, Europe, the US and Brazil.

Brazilian Retreat

GCP provided no specific details about the assets, which were acquired by Sao Paulo-listed logistics trust BTG Pactual Logistica FI Imobiliario. The transaction is the largest logistics real estate transaction in Brazil’s REIT market, according to GCP, citing data from research provider SiiLA.

“Our capital recycling plan is closely aligned with investor goals, and we have a proven track record of growth that spans years of market leadership in Brazil,” said Ricardo Antoneli, SVP of investments at GCP in Brazil. “We continue to execute on our proven investment strategies, allocating over BRL 16 billion since the start of our operations in the country.”

Including this disposal, GCP has divested assets worth a combined BRL 6 billion over the last four years, according to the fund manager. In January, GCP sold a set of 12 logistics assets in Sao Paulo via two separate transactions totalling $300 million, with market sources having identified the buyers as BTG Pactual and Canada’s Brookfield Asset Management.

At the time of that January sale, GCP said that it had $3.1 billion in assets under management in its Brazilian business.

The divestments are a reversal from GLP’s entry into the Brazilian market in 2012, when the logistics specialist partnered with the Canada Pension Plan Investment Board (CPPIB), Chinese sovereign fund China Investment Corporation and Singapore state investor GIC to acquire a pair of logistics portfolios from local property investment firm Prosperitas for $1.45 billion, forming what GLP called at the time Brazil’s largest logistics platform.

GLP continued to build its Brazilian holdings in 2014 with the purchase of a portfolio of 34 assets from local investment manager BR Properties for $1.4 billion, and reached final close in 2021 for a Brazil logistics development fund with $530 million in total equity commitments from investors including the Abu Dhabi Investment Authority (ADIA) and CPPIB.

Ex-China Carveout

The divestment of GCP’s non-China business to Ares, which is expected to close in the first half of 2025, follows a separation of GCP International from GCP’s remaining business, which will remain independent and headquartered in Singapore with a focus on investing in Greater China.

The transaction will see GLP co-founder and CEO Ming Z Mei continue to serve as CEO of GLP and GCP’s Greater China business, while GCP International president Michael Steele and various leadership teams responsible for managing and operating the funds in Japan, Vietnam, Europe, the US and Brazil will join Ares.

The consideration for GCP International comprises $1.8 billion in cash and $1.9 billion in Ares Class A common shares, as well as an additional earn-out provision of up to $1.5 billion, subject to achieving certain performance objectives. The acquisition by Los Angeles-based Ares nearly doubles the firm’s assets under management to $96 billion across North America, Europe, Asia and Latin America.

In the past year, GCP’s China business has sold off a number of portfolios by setting up investment vehicles of industrial and commercial assets and increasingly turning to domestic capital sources after the company lost its last investment grade offshore credit rating in November. In August last year, GLP was reported to be making available for sale $7 billion of its China logistics assets.

In February, GLP set up a fund targeting industrial parks in China with an initial investment capacity of more than $350 million, aiming to focus on properties catering to advanced research manufacturing.

That vehicle was announced after GLP in January said that it had brought its China Income Fund XII to a final close with RMB 10 billion of assets under management.