Nasdaq-listed Industrial Logistics Properties Trust (Nasdaq:ILPT) has sold a 39% stake in its joint venture portfolio of 12 logistics assets in mainland USA to an, as yet unnamed, top-tier sovereign wealth fund.
The 39% stake was valued at $108m and the deal means that ILPT’s interest in the JV is reduced to 22%, while the other institutional investor in the JV maintains their share at 39%.
The new investor’s investment is at the same $680m valuation as the existing institutional investor’s original investment in the JV.
ILPT plans to use the approximately $108m of proceeds from this transaction to reduce outstanding borrowings under its $750m revolving debt facility. In addition, ILPT plans to reclassify its 22% equity investment as an unconsolidated joint venture interest and $407m of debt associated with the properties in the JV will no longer be recorded on ILPT’s consolidated balance sheet.
In a statement released by the company, John Murray, President and CEO of ILPT, said that he believed the transaction illustrated the strong demand for quality industrial and logistics assets, despite the economic challenges caused by the COVID-19 pandemic.
He added, “This transaction also substantially reduces our leverage and better positions us for growth in the future. We look forward to both growing ILPT and this joint venture with the acquisition of industrial and logistics properties in the future.”
Industrial Logistics Properties Trust owns and leases industrial and logistics properties throughout the United States. As of September 30, 2020, ILPT owned 301 properties with 43.8 million rentable sq. ft.
November has been a busy month for industrial logistics deals. Transactions in recent weeks have included Blackstone’s $1.1bn investment into Guangdong’s largest industrial logistics park and the announcement by Singapore sovereign wealth fund, GIC, that they were forming a JV with Melcombe Partners to acquire and develop a portfolio of logistics assets in Europe. With COVID lockdowns driving a spike in online retail on the one hand and inventory stockpiling on the other, warehousing and logistics are proving to be resilient sectors in 2020.