GLP J-REIT Selling Greater Tokyo Shed for $72M

GLP J-REIT has agreed to sell a warehouse located northeast of Tokyo to an undisclosed buyer for JPY 10.9 billion ($72 million), as the TSE-listed trust continues to carry out a divestment programme aimed at enhancing value for unitholders.

GLP Kashiwa II in Chiba prefecture comprises 32,364 square metres (348,363 square feet) of leasable area and will change hands at a 40 percent premium to book value and an 11 percent premium to appraisal value, the trust’s manager said in a stock filing.

A robust logistics market prompted GLP J-REIT to proceed with the sale in order to distribute the capital gains from the disposal to its unitholders and improve the quality of its portfolio, according to the manager, which is controlled by US-based Ares Management.

“GLP J-REIT aims to expand unitholder value through distributions of gain on sale and strategic uses of sales proceeds by continuous and timely execution of disposition strategy, leveraging abundant unrealised gain of JPY 303 billion and the largest number of properties among logistics J-REITs,” the manager said.

Fully Leased to Rizap

The four-storey GLP Kashiwa II was built in 2017 by the REIT’s sponsor, GLP Japan, which was acquired by Los Angeles-based Ares in March. Fully leased to fitness and beauty specialist Rizap Group, the shed is situated in an industrial district near National Route 16 and can operate 24 hours a day.

The trust acquired the property in 2020 for JPY 8.1 billion. The gain on sale of JPY 2.9 billion will be distributed to unitholders as dividends and the remaining proceeds will go to various initiatives such as future asset acquisitions and unit buybacks, according to the manager.

The deal comes after GLP J-REIT sold three warehouse assets spanning 88,320 square metres earlier this year for JPY 23.5 billion in the trust’s biggest disposal to date, reaping a gain of JPY 5.2 billion.

Upon completing the sale of GLP Kashiwa II on 31 October, GLP J-REIT’s portfolio will consist of interests in 84 properties with a total acquisition value of JPY 858 billion ($5.7 billion).

New Project Targets 2026

The REIT’s manager announced in February that it had broken ground on the development of its GLP Narashino II project near Tokyo.

The trust is redeveloping a 55,185 square metre site in Chiba prefecture’s Narashino City into a 127,680 square metre, five-storey warehouse, which is expected to be completed in December 2026.

GLP J-REIT acquired the land for GLP Narashino II in 2013 for JPY 8.3 billion.