GLP Confirms €1B Purchase of Goodman European Logistics Assets

GLP announced today that it is acquiring Goodman Group’s central and eastern European logistics assets, doubling the European footprint of the company formerly known as Global Logistic Properties through a €1 billion ($1.1 billion) deal which had first been reported last month.

Asia’s largest warehouse developer and fund manager said in a statement that the acquisition will bring its European presence to almost five million square metres (54 million square feet) across ten countries just two years after GLP entered the market through its $2.8 billion acquisition of UK-based logistics developer Gazeley.

“This deal is a very exciting part of our European growth strategy,” said Nick Cook, chief executive officer of Gazeley. “The scale and geographic footprint of the portfolio is highly complementary to our existing business and offers us compelling opportunities for growth in a number of important European markets.”

Doubling GLP’s European Footprint

The 2.4 million square metres of warehouse space is concentrated along key logistics routes in Europe, where demand is being fuelled by the growth of e-commerce, GLP said.

The Singapore-based warehouse developer and fund manager confirmed to Mingtiandi that 69 percent of the assets being acquired are located in Poland, with another 13 percent in Slovakia, 12 percent in the Czech Republic and 6 percent in Hungary.

The acquisition, which is subject to regulatory approvals, will allow GLP to bolt Goodman’s central and eastern European assets onto Gazeley’s existing 2.4 million square feet of warehouse space – together with the company’s development pipeline of 2.8 million square metres – spread across the UK, Germany, France, Spain, Italy, Poland and the Netherlands.

With $89 billion in assets under management globally, GLP is pushing further into the continent six months after completing an $18.7 billion sale of US logistics assets to Blackstone.

As part of the company’s latest deal, Goodman Group’s 40-person European team will join GLP’s European squad to support the continued growth of the Singapore-based developer and fund manager across Europe, after the company opened offices in Spain and Italy last year.

Riding the E-Commerce Wave

The warehouse specialist led by former Prologis executive Ming Mei is delving further into Europe as the expansion of e-commerce across the region drives demand for warehouse space and pushes up rents.

Prime warehouse rents across Europe grew by 2.4 percent in 2019, one of the highest growth rates in the past ten years, according to a report released by JLL last month, which also noted that the rental upswing would continue as land availability shrinks and occupier demand increases.

In Poland, where the bulk of GLP’s latest acquisition is concentrated, tenants leased over 4.1 million square metres leased last year – the second highest level of absorption ever recorded in the country, according to Savills.

The property consultancy said that headline rents for institutional grade logistics assets at the end of 2019 ranged from €2.7 to €4 per square metre per month, depending on the specifications and age of the property.

Ramping Up Logistics Assets in the Old Continent

With e-commerce-fuelled demand for logistics assets promising strong rental returns, institutional investors from Asia are ramping up their presence in Europe.

Just last week, Savills Investment Management announced that, together with Seoul-based Vestas Investment Management it had agreed to pay an undisclosed sum to acquire a commercial building and two logistics assets in Denmark on behalf of Korean investors.

The London-headquartered fund manager said that the acquisition brings Vestas IM’s European logistics under management to €1 billion.

In a deal announced last December, Singapore’s sovereign wealth fund, GIC, which was formerly the largest shareholder in GLP, ramped up its European logistics platform by agreeing to acquire a 28 asset warehouse portfolio from Apollo Global Management for about €950 million. GIC said that it will integrate the 1 million square metre portfolio into its existing pan-European warehouse platform P3 Logistic Parks.

Note: This story has been updated to indicate GLP’s reported $89 billion in assets. An earlier version of the story referred to S$89 billion — Mingtiandi regrets the error.