Realty Income establishes strategic partnership with GIC

Realty Income Corporation, The Monthly Dividend Company, announced Monday the establishment of a strategic relationship with Singapore’s sovereign wealth fund GIC. The duo said in a statement that the partnership will initially entail the formation of a programmatic joint venture primarily focused on build-to-suit development of high-quality logistics real estate pre-leased under long-term net leases to tenants with investment grade-equivalent credit profiles in the U.S. The JV will have over $1.5 billion of combined capital commitments from Realty Income and GIC. Meanwhile, the construction financing and take out purchase commitment from Realty Income of a $200 million build-to-suit, U.S. dollar-denominated industrial portfolio in Mexico, representing Realty Income’s first investment in Mexico; and GIC closing as a cornerstone investor in Realty Income’s U.S. Core Plus fund. This relationship is expected to be long-term and programmatic in nature and is a component of Realty Income’s private capital initiative aimed at diversifying its sources of capital beyond the public capital markets, while expanding its investable universe to core investment opportunities with attractive potential long-term return profiles. “We are proud of the unique global platform we have curated since 1969 which affords us the opportunity to partner with like-minded, long-term investors to deploy and manage capital at scale, “Our size, track record, industry-leading team, and predictive data analytics platform affords us the ability to source, underwrite, and asset manage a diversified portfolio in a highly efficient manner,” said Sumit Roy, President and Chief Executive Officer of Realty Income. “We believe our ongoing partnership with one of the world’s most respected real estate investors will amplify these strengths and further expand our addressable market of investments, unlocking incremental growth opportunities for Realty Income at higher effective returns than would otherwise be possible, “The strength of our relationship with GIC is further reflected in their commitment as a cornerstone investor in our U.S. Core Plus open-end fund. We look forward to working together in the years ahead to create lasting value for our collective stakeholders,” he added. Goh Chin Kiong, Chief Investment Officer of Real Estate, GIC, said GIC is pleased to establish a strategic partnership with Realty Income, one of the largest and most tenured global players in the triple net lease sector. “Our long-term capital, paired with Realty Income’s expertise and market access will allow us to unlock significant value through investments in mission critical, state-of-the-art build-to-suit logistics assets,” he added. Cai Wenzheng, Head of Americas, Real Estate, at GIC, said they continue to have high conviction in the net lease sector to generate strong, long-term, predictable cash yields for their portfolio. “This partnership complements our existing direct exposure to the U.S. net lease space, unlocking direct access to the logistics investment-grade segment of the market where we expect continued growth. We look forward to scaling our relationship meaningfully with Realty Income over the long term,” he added. In conjunction with this announcement, Realty Income and GIC have agreed to terms on the formation of a joint venture to finance the development and purchase of build-to-suit assets in the U.S. with a focus on industrial assets leased to investment grade-equivalent tenants. Purchased assets under the joint venture will be majority owned by Realty Income. In addition, Realty Income and GIC, alongside GIC’s development partner, Hines, have agreed to terms on the development financing and takeout purchase of a portfolio of industrial properties in Mexico. As part of this transaction, Realty Income and GIC will jointly finance the construction of the properties, and Realty Income has agreed to purchase the properties upon completion of construction for a combined purchase price of approximately $200 million. These logistics assets are located in Mexico City and Guadalajara and are pre-leased to Global Fortune 100 companies under long term net lease agreements. Greenhill, a Mizuho affiliate, acted as financial advisor to Realty Income. GIC, SoftBank could sell stake in Vietnam’s fintech firm VNLife – report