Inside the portfolio under negotiation between RELG11 and GGRC11; Transaction exceeds R$133 million, with a projected 9.4% Cap Rate

The four properties are located in the Southeast region, all have long-term lease agreements, but only one meets high-end criteria
SiiLA’s intelligence team estimates a 9.4% Cap Rate for the transaction

Moise Politi, managing partner at REC, the asset manager of FII RELG11

By: SiiLA News

03/21/2025

The real estate investment fund (FII) GGRC11 has announced a Letter of Intent to acquire the entire portfolio of the RELG11 fund in a deal valued at R$133.4 million, through the issuance of shares from the acquiring fund. The agreement involves the transfer of four industrial properties located in the states of São Paulo, Minas Gerais, and Rio de Janeiro.

Moise Politi, managing partner at REC, the asset manager of FII RELG11, detailed the transaction in an interview with REsource. “Following the proposal, a virtual meeting with shareholders will be held for voting, requiring a minimum quorum of 25%. If the majority approves, the transaction will be finalized. GGRC11 will issue new shares, and once approved, it will proceed with the registration of the issuance,” explains the executive.

“Starting today, due diligence on the assets will begin to ensure compliance. This process should take about two months, and at the end of this period, the exchange of shares for the warehouses will take place,” adds Politi.

According to SiiLA’s real estate data platform, Market Analytics, the assets involved in the transaction belong to different categories, with only one qualifying as an A-class property: REC Log Extrema.

The other properties in the fund include REC Log Queimados, a B-class property; REC Log Contagem, a C-class property; and REC Log Cotia, classified as a standalone warehouse, meaning it does not meet SiiLA’s monitored standards.

The transaction

According to an analysis by SiiLA’s intelligence team, if the deal goes through, the transaction’s Cap Rate will be 9.4%. Once the transaction is finalized, GGRC11 will fully own the rental income from these properties.

In an interview with REsource, Politi stated that the next steps after the sale’s completion are still under analysis. “The proposal involves a set of conditions. There are restrictions and the distribution of the amounts follows specific criteria. After six months, a new assessment will be conducted, and depending on the conditions, an additional premium may be added to the price. There are evaluation checkpoints at six and twelve months, which could result in a 10% price increase,” he explains.

“This is an initial phase, and if we manage to execute and close the deal, we will increase the asset’s visibility, with a valuation higher than what was previously estimated. In fact, on Thursday (20), the fund opened between R$76 and R$77, whereas the previous day it was in the R$59 range,” concludes Politi.

The properties

Photo: Disclosure

The assets acquired by GGRC11 include REC Log Cotia, an 18,000-sqm warehouse located on Estrada dos Estudantes in Cotia (SP), currently leased to New Space under a contract valid until 2032.

The portfolio also includes REC Log Extrema, with a gross leasable area (GLA) of 11,600 sqm in Extrema (MG), where Máxima/Hinode and Arclad operate under lease agreements set to expire in 2028.

Another asset in the transaction is REC Log Queimados, located in the Queimados Industrial Park (RJ), with 12,300 sqm of GLA, leased to companies such as Praobra, Shalloon, TCI BPO, and Mauser, with contract expirations ranging from 2025 to 2033.

Finally, the last property in the portfolio is REC Log Contagem, with 16,700 sqm of GLA in Contagem (MG). However, only 8,000 sqm are part of the transaction. The area being sold is leased to P&P Distribuidora under a contract valid until 2028.

RELG11 vs GGRC11

Both FIIs are in different market positions. If RELG11 accepts GGRC11’s offer, the fund will no longer hold any properties in its portfolio. Recently, the FII acquired a property in Camaçari but terminated the deal in January.

On the other hand, GGRC11 has a large portfolio, though it is mostly composed of standalone warehouses or assets that do not qualify for SiiLA’s monitoring classification. Recently, the FII faced a setback when Suzano vacated a property in Campinas.

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