Singapore’s GIC Teams With Realty Income on $1.5B North American Logistics JV

GIC and Realty Income Corporation have launched a North American logistics joint venture, with the Singapore sovereign giant and the NYSE-listed REIT committing more than $1.5 billion in combined capital to the partnership.

The JV will focus on build-to-suit US projects pre-leased to tenants with investment-grade credit profiles under long-term net leases, the companies said Monday in a release. In addition, GIC will act as a cornerstone investor in Realty Income’s US Core Plus fund, an open-ended vehicle seeded with $1.4 billion in assets, including 183 industrial and retail properties across 33 states.

The $800 billion Singaporean fund is positioning its investment as a long-run bet on the triple net lease sector, in which tenants are responsible for the base rent plus operating expenses. 

“We continue to have high conviction in the net lease sector to generate strong, long-term, predictable cash yields for our portfolio,” said Cai Wenzheng, head of Americas real estate at GIC. “This partnership complements our existing direct exposure to the US net lease space, unlocking direct access to the logistics investment-grade segment of the market where we expect continued growth.”

Hines Mexico Projects

The companies did not disclose their respective equity stakes in the new venture, saying only that the assets purchased by the JV would be majority-owned by Realty Income.

The deal includes a commitment for a dollar-denominated portfolio of logistics properties in Mexico built by GIC’s development partner, Hines. GIC and Realty Income will jointly finance the construction of the properties, with the REIT agreeing to purchase the assets upon completion for a combined $200 million.

The logistics assets are located in Mexico City and Guadalajara and are pre-leased to Global Fortune 100 companies under long-term net lease agreements, the companies said.

Founded in 1969, Realty Income manages a portfolio of more than 15,500 properties in all 50 US states, the UK and seven other countries in Europe. The trust touts its unusual feature of paying monthly dividends to unitholders.

“Our size, track record, industry-leading team and predictive data analytics platform affords us the ability to source, underwrite and asset manage a diversified portfolio in a highly efficient manner,” said Realty Income CEO Sumit Roy. “We believe our ongoing partnership with one of the world’s most respected real estate investors will amplify these strengths and further expand our addressable market of investments, unlocking incremental growth opportunities for Realty Income at higher effective returns than would otherwise be possible.”

European Footprint Grows

GIC’s latest overseas push follows last week’s news that the state-backed investor’s European logistics platform had acquired a nine-asset portfolio in Spain.

Prague-based P3 acquired the set of eight warehouses and an EV parking platform with a gross leasable area of ​​122,000 square metres (1.3 million square feet) from Scottish asset manager Aberdeen for €146 million ($170.4 million), radio network SER reported. GIC has wholly owned P3 since acquiring the company in 2016 for $2.7 billion.

British Land announced Monday that longtime chief executive Simon Carter would be leaving the UK developer to become CEO of P3, which has 9.7 million square metres under management across 11 countries.