Singapore’s sovereign wealth fund, GIC, has established a $412.4 million shopping centre joint venture with New York Stock Exchange-listed RPT Realty, according an announcement by the US real estate investment trust this week.
The $100 billion government investment vehicle is investing an intitial $118.3 million in cash in return for a 48.5 percent interest in what the partners have dubbed RPT-GIC Venture (RGV). RPT, which owns and operates a portfolio of unenclosed shopping centres around the US, is seeding the JV with a set of five open-air retail assets in Florida, Missouri and Michigan valued at $244 million and will retain a 51.5 percent stake in the partnership.
GIC is also committing up to $200 million in additional capital over the next three years to fund its share of RPT-GIC Venture’s potential future acquisitions of grocery-anchored shopping centres in the US, primary targetting second and third tier .
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“GIC’s investment with RPT validates the strength of our operating platform, the quality of our assets and the open-air shopping center sector overall, while providing the company with significant capital to accelerate our entry into our high growth target market that will support sustainable long-term net operating income growth,” said Brian Harper, president and CEO of RPT.
The American-Singaporean partnership’s initial portfolio consists of Coral Creek Shops in Coconut Creek, Florida, Mission Bay Plaza in Boca Raton, Florida, The Crossroads in Royal Palm Beach, Florida, Town & Country Crossing in Town & Country, Missouri, The Shops at Old Orchard in West Bloomfield, Michigan, totaling 776,905 square feet (72,176 square metres) of gross leasable area.
RPT, which serves as asset manager for the JV, will receive property management, construction management and leasing fees from RGV. The company will also be responsible for the day-to-day management of the properties as well as sourcing future acquisitions for the joint venture.
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With up to $412.4 million in capital to deploy over the next three years, the partners aim close on initial joint venture acquisitions during 2020, according to the statement.
In addition to the starter portfolio RPT-GIC Venture is looking to invest in similar properties in growth markets across the US, such as Austin, Texas; Nashville, Tennessee; Charlotte and Raleigh, North Carolina; Minneapolis, Minnesota; Richmond, Virginia; Phoenix, Arizona; Miami, Orlando and Tampa, Florida, and Boston, Massachusetts.
New York-headquartered RPT, formerly known as Ramco Properties Trust and Ramco-Gershenson Properties Trust, owns and operates 48 shopping centers in the US as of September 30, 2019. The portfolio represents 11.8 million square feet in total and is 94.7 percent leased.
Among RPT’s flagship properties are River City Marketplace in Jacksonville, Florida, The Shops on Lane Avenue in Upper Arlington, Ohio; Woodbury Lakes in Woodbury, Minnesota and Webster Place in Chicago, Illinois.
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For GIC, the shopping centre joint venture adds a retail element to a basket of property acquisitions which had focused on offices, hotels and other segments during the closing months of 2019,
In its most recent previous US deal, in October GIC formed a joint venture with NYSE-listed real estate investment trust Summit Hotel Properties to acquire four hotels along the west coast of the US for $249 million. The 710-room portfolio consists of two Residence Inn by Marriott hotels in Portland, Oregon and a pair of Hilton Garden Inns in California’s Bay Area, and at the purchase price of $249 million the GIC-Summit JV paid approximately $351,000 per key for its new hospitality properties.
That US acquisition came after the fund in early November teamed up with Australia’s Charter Hall to buy a Sydney office tower from Brookfield for A$415 million ($287 million). Later that same month, GIC partnered with Berlin-based Caleus Capital Investors to acquire a €125.9 million ($139 million) hotel in Berlin in an off-market transaction.