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The logistics unit of Singapore sovereign fund GIC (GIC.UL) has assets worth over US$8 billion ($10.7 billion) and the fund hopes to sell a minority stake in the business at 1.3 to 1.4 times book value, a source briefed on the listing said on Tuesday.
The source also said that 65% of Global Logistic Properties’ (GLP) asset value comprises warehouses and other buildings in Japan, with China accounting for the remainder. The GIC unit owns 296 properties of which 69 are in Japan.
The source also said that 65% of Global Logistic Properties’ (GLP) asset value comprises warehouses and other buildings in Japan, with China accounting for the remainder. The GIC unit owns 296 properties of which 69 are in Japan.
GIC will retain at least 50% of its logistics unit after the initial public offering next month, added the source who was at a briefing for fund managers held by one of the bookrunners for GLP’s initial public offering.
"At such valuations, the IPO may be be a tough sell. It’s not a China story as the bulk of the assets are in Japan," said the source, who declined to be identified as the briefing was confidential.
GIC was not immediately available for comment.
GIC last week kicked off the "pre-marketing" of GLP’s IPO that aims to raise as as much as US$3 billion, potentially making it Singapore’s largest IPO ahead of Singapore Telecommunications (STEL.SI) $4 billion listing in 1993.
The bookbuilding is scheduled to begin on Sept 23 and the IPO will be priced on Oct 8, according to a note seen by Reuters.
The GIC unit’s IPO comes at a time when several other companies are planning to raise funds through equity sales in Asia.
In Hong Kong, American International Group (AIG.N) is planning to list its Asian life insurance business AIA in a deal that could raise as much as US$15 billion.
Malaysian national oil company Petronas is listing its petrochemical arm to raise more than US$2 billion, while Singapore’s Mapletree will float an industrial real estate investment trust with assets of about $1.7 billion.
The source said GLP, which is both a landlord and developer, expects to report core net earnings of US$231 million in 2011 and US$277 million in 2012.
GLP holds assets that GIC’s real estate unit bought in 2009 from ProLogis (PLD.N), one of the world’s biggest warehousing firms. It is headed by former ProLogis Chairman and CEO Jeff Schwartz, the man credited with building the U.S. firm’s Asian and European operations.
