Ares Management Corp. announced a $3.7B acquisition plan Tuesday that positions the investment firm to become what it says would be the world's third-largest industrial landlord.
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Ares has reached an agreement with Singapore-based GLP Capital Partners to acquire the industrial asset manager's international business, excluding its operations in China.
Ares is set to acquire a majority of the $44B in global assets GLP Capital Partners had under management as of June, including industrial assets, data centers and self-storage facilities in Japan, Europe, Brazil, Vietnam and the U.S. The entity being sold to Ares is called GCP International.
The deal, which is expected to close in the first half of 2025, would nearly double the assets under management for Ares to roughly $96B.
The terms of the acquisition include $1.8B in cash and $1.9B in Ares Class A common shares. The deal includes long-term performance targets that could boost the final price tag to as much as $5.2B, the Financial Times reported.
“We have great respect for the business that the GCP International leadership team has built, and we believe that there are attractive strategic synergies between our firms,” Bill Benjamin and Julie Solomon, co-leaders of Ares Real Estate, said in a statement. “Combining our platforms will further enhance our strong position in the industry and bolster Ares as a global market leader in real estate.”
The acquisition reflects Ares executives’ belief that the global industrial real estate market continues to enjoy demand tailwinds and resilient fundamentals across market cycles. It also positions the firm to capitalize on the growing data center demand as artificial intelligence drives the need for more computing power.
GLP Capital Partners has multiple hyperscale data center projects underway, including properties in London, Tokyo, Osaka and São Paulo. In total, the firm manages 23 funds and a portfolio spanning 320M SF.
The transaction would see GLP Capital Partners maintain control of its Chinese properties as an independent firm that would keep its headquarters in Singapore. Ming Mei, the co-founder of GLP Capital Partners, will continue to lead those operations while also joining Ares as a senior adviser.
Teams responsible for overseeing funds in Japan, Europe, the U.S., Brazil and Vietnam will join Ares as part of the deal. Ares’ stock was down more than 2% on the news during early trading Tuesday.
The deal would push Ares into Asia after the firm established a strong U.S. presence through acquisitions of investment firms, including Landmark Partners and Black Creek in 2021. The company has since been pushing into Europe, most recently with the £200M acquisition of a Royal London Asset Management portfolio of UK properties.
Investor interest in industrial assets accelerated during the pandemic amid a spike in demand as retailers looked for space to store products stateside. The AI boom has supercharged demand and investment in the data center space and spurred industrial developers like Prologis and Panattoni to launch data center arms of their own.
The rapid ramp-up in energy requirements is testing infrastructure, with new data centers creating an additional New York City’s worth of demand on the U.S. power grid last year alone. Investment bank TD Cowen estimates that data centers will consume 6% of all U.S. power by 2028.
“We have long admired the global real estate experience of GCP and its capabilities in facilitating the economy of the future,” Ares CEO Michael Arougheti said in a statement. “As a combined business, we believe that Ares’ and GCP International’s experienced management teams, highly collaborative cultures and investment track records will create a powerhouse in global real assets investing.”
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