GLP Japan REIT Buying Four Warehouses for $420M, Financed by Sale of New Units

Tokyo-listed GLP J-REIT plans to acquire three warehouses across Japan and a partial stake in a fourth shed for a total consideration of JPY 58.2 billion ($420 million), with the bulk of the amount to be financed by the issuance of new equity.

The four assets, which include two on the main island of Honshu and one each on Kyushu and Okinawa, were developed by the REIT’s sponsor GLP and will add 269,487 square metres (2.9 million square feet) of gross floor area to the $6 billion trust’s portfolio.

To fund the acquisition, GLP J-REIT will raise an estimated JPY 30.6 billion from the sale of newly issued units, the trust’s manager said Monday in a stock filing. The balance of the consideration will be satisfied by cash on hand and a borrowing to be announced later.

“Through the purchase of the assets planned for acquisition, GLP J-REIT aims to secure steady income over the medium to long term and achieve steady growth of assets under management to further strengthen its competitive, high-quality portfolio,” the manager said in a separate announcement.

Slice of Mega-Project

GLP J-REIT is picking up a 30 percent interest in the largest asset of the four-property set, a 138,028 square metre warehouse dubbed GLP Alfalink Sagamihara 4, for JPY 19.4 billion. The shed forms part of GLP Alfalink Sagamihara, a 650,000 square metre mega-project that GLP began developing on Greater Tokyo’s western fringe in 2019.

Completed last November, GLP Alfalink Sagamihara 4 is fully leased to a single undisclosed tenant and draws on the workforce of Sagamihara, a city of over 720,000 with a growing youth population, said the trust’s manager, which estimates the property’s net operating income yield at 3.6 percent.

The three other assets are GLP Fukuoka Kasuya, a 41,236 square metre warehouse fully leased to e-commerce giant Rakuten (acquisition price: JPY 14 billion); GLP Okinawa Urasoe, a 57,891 square metre facility serving third-party logistics firm Anshin (JPY 17.9 billion); and GLP Soja III, a 32,332 square metre hub for western Honshu whose four tenants include Japan Post (JPY 7 billion).

The scheduled acquisition date is 1 June, at which time the consideration of JPY 58.2 billion will be paid in full, the manager said.

Well-Tenanted Portfolio

Listed in 2012, GLP J-REIT comprises 89 properties with a gross floor area of 3.9 million square metres, a weighted average lease expiry of 4.5 years and an occupancy rate of 98.8 percent.

Based on acquisition prices, more than 67.3 percent of the portfolio is situated in the Tokyo metropolitan area, with 20.6 percent in Greater Osaka and 12 percent elsewhere. By appraised value, the trust’s top asset is the JPY 55.5 billion GLP Tokyo II, a 85,455 square metre complex located 6.5 kilometres (4 miles) from the centre of the capital.

The portfolio’s largest asset, GLP Osaka, spans 141,604 square metres of gross floor area and provides multiple tenants with direct access to the Kansai region’s Hanshin Expressway.