GLP J-REIT Selling Saitama, Fukushima Warehouses for $160M to Meet Divestment Target

GLP J-REIT has agreed to sell three warehouse assets to an undisclosed buyer for JPY 23.5 billion ($160 million), marking the Tokyo-listed trust’s biggest disposal to date.

The set of properties includes two sheds in Greater Tokyo’s Saitama prefecture and a two-building complex in the northern city of Koriyama in Fukushima prefecture, the trust’s manager said Wednesday in a stock filing.

The warehouses comprise 88,320 square metres (950,669 square feet) of leasable area and will change hands at a 30 percent premium to book value, according to the manager, which is controlled by US-based Ares Management. The divestment will help GLP J-REIT achieve its goal of JPY 20 billion in assets sales a year as the trust looks to boost its annual dividend per unit to JPY 7,000.

“The gain on sale will be distributed to unitholders of GLP J-REIT as dividends and the remaining amount of the sales proceeds will be used to enhance unitholders value through active implementation of various initiatives such as share buyback or fund allocation to acquire properties in the future,” the manager said.

Shifting Sheds

The highest-valued of the target assets, GLP Kawajima in Saitama prefecture, is set to trade for JPY 14.5 billion. Spanning 42,187 square metres of leasable area, the four-storey shed was built in 2017 by the REIT’s sponsor, GLP Japan, which was acquired by Los Angeles-based Ares in March.

The other Saitama property, GLP Kasukabe, was built in 2004 and contains 18,460 square metres of leasable area, while GLP Koriyama III in Fukushima dates to the 1990s and has 27,672 square metres of leasable area. The Saitama sheds are fully occupied and the Koriyama complex is 99.8 percent occupied.

GLP J-REIT anticipates a gain on disposal of JPY 5.2 billion, the trust’s largest ever from a single transaction. The Kawajima and Kasukabe assets are due to be transferred on 30 June and the Koriyama complex on 1 September.

On completion of the transfers, GLP J-REIT’s portfolio will consist of 85 properties with a total acquisition value of JPY 866.1 billion ($6.1 billion).

New Tokyo Project

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.