GLP Reunites with CPPIB, QuadReal to Boost European Fund to $4.9B; Completes China IPO

GLP is upsizing its European logistics development venture with its pair of Canadian partners, aiming to boost assets under management to €4 billion ($4.9 billion) from the original target of €2 billion.

The logistics giant announced Monday that the Canada Pension Plan Investment Board (CPPIB) and British Columbia pension fund manager QuadReal Property Group had agreed to raise the investment capacity of GLP Continental Europe Development Partners I.

“This upsize is testament to how well GLP CDP I has performed since its inception,” said Ralf Wessel, managing director for fund management at GLP. “Our investment pipeline is considerably ahead of schedule and we are seeing strong demand for our developments, reflecting attractive fundamentals for logistics development across all major hubs in Europe.”

The booster stage for the European venture was announced on the same day that GLP completed the initial public offering of its first real estate investment trust in mainland China, helping the largest logistics developer based in Asia raise more than $900 million.

Fresh Capital

GLP CDP I was set up in 2018 to develop modern logistics assets in Germany, France, Italy, Spain and the Netherlands. The upsize will transform the fund into a pan-European vehicle by strategically expanding in the UK and Central and Eastern Europe via the acquisition of landbank and select high-quality development opportunities, GLP said in a release.

Under the fund’s expansion plan, CPPIB has committed €900 million of equity, representing a 45 percent share, and QuadReal has committed €800 million of equity, representing a 40 percent share, with the remaining 15 percent held by GLP.

The Canadian public pension manager just last year had teamed with GLP in a separate venture in Japan, with CPPIB committing $235 million to that core strategy. Ranked among the 10 largest pension fund managers in the world, the Toronto-based organisation is also working with GLP in India, where it formed a partnership with the developer’s Indospace unit in 2018.

“GLP CDP I is a key part of our development-led growth strategy in the logistics sector globally,” said Andrea Orlandi, head of real estate investments for CPPIB Europe. “Given the success of the venture to date, we are pleased to be continuing and expanding our partnership with GLP and QuadReal.”

 

The private investment vehicle is GLP’s third European fund, following GLP Europe Income Partners I and GLP Europe Development Partners I, both of which closed in August 2018 and raised a total of $4 billion.

Vancouver-based QuadReal, which manages the global real estate portfolio of British Columbia pension fund BCIMC, had been among the investors in the first two European funds, which were set up in tandem with GLP’s acquisition of UK warehouse developer Gazeley in 2017.

Since entering the European market in 2017, GLP has more than tripled its assets under management. After the expansion of GLP CDP I, the firm now manages AUM of more than €12 billion across Europe’s key logistics markets.

China REIT IPO Completed

Also on Monday, GLP revealed that its Chinese real estate investment trust, GLP C-REIT, had completed its initial public offering, becoming the first logistics C-REIT to list on the Shanghai Stock Exchange.

The IPO raised more than RMB 5.8 billion ($910 million) based on 1.5 billion shares priced at RMB 3.89 per share, with the institutional tranche 6.7 times oversubscribed and the retail tranche almost 10 times oversubscribed, GLP said.

GLP C-REIT’s portfolio consists of seven logistics assets in Beijing, the Yangtze River Delta and Guangdong province, with over 700,000 square metres (7.5 million square feet) of gross floor area, with the properties averaging 98.7 percent occupancy as of December 2020.

“The listing of China’s first infrastructure REITs is one of the most awaited events for the industry and GLP is proud and honoured to be the first international company to complete this landmark transaction,” said Teresa Zhuge, executive vice chairman of GLP China. “We continue to see robust investor demand for stable logistics and industrial assets and income streams in China and will continue to leverage our industry-leading team and portfolio to generate attractive returns for our shareholders.”

Ahead of the public issue, GLP C-REIT was 52 percent pre-committed by six cornerstone investors: Taikang Life (20 percent), Shoucheng Holdings (10 percent), Dajia Investment Holding (8.39 percent), CICC Wealth Management (8.33 percent), CCB Trust (3.5 percent) and China Insurance Investment Fund (1.78 percent). GLP retains a 20 percent ownership interest in the REIT.