Singapore’s Global Logistic Properties is planning an initial public offering of its Japanese assets that could raise at least 100 billion yen ($1.3 billion) in the first IPO for a real estate trust in Japan in four years, three people with direct knowledge of the matter said.
GLP, the warehouse unit of Singapore wealth fund GIC, has hired Citigroup Inc , Goldman Sachs and Nomura Holdings as the main underwriters for the IPO, said the people, who asked not to be identified because the transaction is not public.
The shares will be sold both in Japan and overseas by the end of this year, they said.
GLP owns warehouses nationwide in Japan and its assets are worth about 516 billion yen, according to its website.
A GLP spokeswoman in Singapore declined to comment.
The company aims to expand in Japan, where it has won exclusive rights to negotiate the purchase of warehouse assets from LaSalle Investment Management for about 140 billion yen, sources with direct knowledge of the situation have told Reuters.
GLP’s Reit would join Japan Logistics Fund and Industrial & Infrastructure Fund Investment , the two publicly listed real estate trusts in Japan that focus on the warehousing businesses. Both Reits trade around 20 times historic earnings.
GLP may face a tough time attracting investors as Japan’s Reit index has lost more than 15 percent since the beginning of this year, about the same as the decline in the benchmark Nikkei 225 stock average over the same period.
The company may, however, find investors willing to bet on stable growth in the warehouse sector, particularly with mail-order companies expanding.
CB Richard Ellis said in July that, despite damage from the March 11 earthquake and tsunami in northeast Japan, demand for logistics facilities was firm in the greater Tokyo metropolitan area, the country’s largest centre of consumer spending.
“In greater Tokyo, industries that require large warehouses and logistics facilities continue to perform well,” Junichi Taguchi, managing director of industrial services at CB Richard Ellis, said in July in a media statement.
New warehouse supply is expected to come onstream by the end of next year but the balance between supply and demand is unlikely to be disturbed in the greater Tokyo area, he added.
GLP reaffirmed its commitment to the Japanese market this month with an announcement of a joint venture with Canada Pension Plan Investment Board to develop logistics facilities in Japan, investing $250 million each.
In October of last year, GLP conducted a $3 billion initial public offering in Singapore’s third-biggest IPO ever. (Reuters)