GLP Posts $1.8B Loss, Looks to Right Ship After Sale of International Funds Business

GLP swung to an annual loss of $1.8 billion on China asset markdowns and other non-cash items, but the Asian warehouse specialist touted improved cash flows and hinted at a turnaround following the March sale of its international funds business to Ares Management.

The shortfall for the 12 months to December reversed a $233 million profit recorded in 2023, GLP said Thursday in an announcement to the Singapore Exchange. Despite the red ink, the developer and fund manager pointed to $2.3 billion in net cash flow generated from operating and investing activities — a fourfold increase year-on-year — mainly on asset sales and reduced spending.

GLP’s China-focused funds business raised $3.5 billion in new equity last year, according to the group. Chief financial officer Nicholas Johnson said GLP would build on its “strong foundation” of a resilient portfolio and prudent capital management to continue pursuing opportunities that align with the group’s long-term objectives.

“The group maintains strong conviction in our new economy focus areas of logistics, digital infrastructure and energy transition and remain dedicated to delivering long-term value creation to all stakeholders,” Johnson said in a release.

Domestic-Facing Tenants

With global tariffs in the headlines, GLP noted that its China tenant base is oriented towards domestic consumption with less than 10 percent of its portfolio tied to export activities.

The group’s weighted average lease expiry at the end of 2024 was 3.5 years, with 90 percent of its space leased. New and renewal lease signings rose 11 percent to 34 million square metres (366 million square feet).

GLP’s data centre business grew revenue 43 percent year-on-year to $193 million, yielding $51 million in earnings before interest, tax, depreciation and amortisation, as demand from AI adoption and cloud computing boosted income. The group last month announced the closing of its first data centre fund with RMB 2.6 billion ($360 million) in assets under management.

Also Thursday, GLP announced the pricing of $300 million in three-year senior unsecured notes at 9.75 percent interest, to be issued on 20 May and listed on the Singapore Exchange.

Proceeds from the issuance will be used to partly refinance GLP’s outstanding $1 billion in senior unsecured notes due this year. The latest notes are expected to be rated BB, or speculative grade, by Fitch Ratings.

“The bond issuance aligns with GLP’s refinancing strategy and underscores our commitment to proactive capital management when market conditions align with our objectives of financial prudence and flexibility,” Johnson said.

Ares Windfall

In March, GLP completed the sale of its ex-China fund management business to Ares for a total consideration of more than $5 billion, including an upfront purchase price of $3.7 billion and a deferred consideration of up to $1.5 billion contingent on achieving certain performance targets.

“The group anticipates a significant gain on disposal in the first half of 2025 from this platform monetisation,” GLP said in a Thursday filing.

Following the transaction, GLP manages $80 billion in assets and holds $6 billion in dry powder in its funds. The group continues to operate independently under the leadership of co-founder and CEO Ming Z Mei, based in Singapore, with a focus on investing in Greater China.

Los Angeles-based Ares has aggressively expanded its Asia Pacific footprint in recent years, first with the 2020 acquisition of Hong Kong-based distressed debt specialist SSG Capital and later with the 2023 purchase of Singapore-based private equity firm Crescent Point Capital.

The NYSE-listed company also joined PAG, CITIC Capital, the Abu Dhabi Investment Authority and Mubadala Investment Company last year in the $8.3 billion takeover of Dalian Wanda Group’s primary shopping mall management business.

Bloomberg reported in March that Ares had approached at least two banks with an offer to buy their holdings of debt issued by troubled Hong Kong builder New World Development.