US real estate continues to attract Singapore’s state-backed investment giants, with sovereign wealth fund GIC set to purchase a 27-hotel portfolio via a joint venture after reportedly acquiring 328 industrial properties in a separate deal.
Summit Hotel Properties, a New York-listed REIT, announced Wednesday that it had signed a joint venture agreement with GIC to buy the 27 hotels in Texas, Oklahoma and Louisiana, along with two parking structures, for a total consideration of $822 million. The seller is Texas-based hotel management firm NewcrestImage, Summit said in a release.
GIC’s 49 percent estimated equity contribution to the transaction is $208 million in cash. Summit will fund its 51 percent controlling interest through the issuance of operating partnership units totalling $210 million, with bank borrowing to cover a further $410 million. The deal is expected to close by the first quarter of 2022.
“We have creatively structured the transaction with the issuance of both common and preferred operating partnership units and continued our partnership with GIC, which will preserve nearly all our existing liquidity of approximately $450 million,” said Jonathan Stanner, president and chief executive of Austin-based Summit.
The 3,709-key portfolio consists of newer-vintage hotels under brands managed by Marriott, Hilton, Hyatt and IHG. Six of the hotels opened in 2019 or later, including the 195-key AC Hotel by Marriott Houston Downtown and the under-construction Canopy by Hilton New Orleans. The average effective age of the acquisition portfolio is 3.8 years, Summit said.
Summit’s current portfolio consists of 73 hotels, 61 of them wholly owned, with a total of 11,398 guest rooms in 23 states. NewcrestImage, controlled by the Patel family, has transacted over 184 hotels since the firm’s founding in Texas four decades ago.
Separately on Wednesday, EQT Exeter announced the sale of a $6.8 billion, 70.5 million square foot (6.5 million square metre) portfolio of 328 industrial properties across the US. Real estate market information provider CoStar reported that the buyer was an investment group led by GIC.
EQT Exeter is a real estate investment manager formed by Swedish private equity firm EQT and Philadelphia-based Exeter Property Group, which EQT acquired this past January for $1.9 billion. EQT Exeter declined to comment on the reported sale when contacted Friday by Mingtiandi.
CoStar in mid-October said GIC had agreed to buy out EQT Exeter’s Europe Value Venture Fund III and its 22.6 million square foot portfolio for $3.58 billion. In 2015, GIC had set up a €300 million (now $346 million) partnership with Exeter Property Group to invest in European logistics properties.
Singapore’s Shed Spree
The industrial portfolio, made up mostly of logistics properties that serve the supply chains of major corporations, was sold on behalf of EQT Exeter’s private real estate funds, EQT Exeter Industrial Value Fund IV and related investment vehicles in a deal managed by Temasek-controlled brokerage Eastdil Secured.
EQT Exeter didn’t specify any of the assets sold, saying only that they included facilities for big-box regional distribution, e-commerce fulfilment and last-mile distribution. The portfolio spans the distribution hubs of New York, Dallas, Atlanta, Chicago and Los Angeles, as well as the e-commerce and air cargo hubs of Memphis, Indianapolis, Columbus and Louisville.
GIC’s splash in the US industrial market comes just over a month after Singapore’s Mapletree Investments announced that it had spent $3 billion to acquire two portfolios totalling 141 logistics assets in the US through separate transactions in July and September.
Mingtiandi reported that the Temasek Holdings-owned firm purchased at least one of the sets of warehouses from funds managed by Exeter Property Group, a longtime Mapletree partner.