Global Logistic Properties

Global Logistic Properties: DBS Vickers reckons GLP’s proposed J-Reit will offer a differentiated strategy, with a yield-driven J-Reit focusing on mature and stabilized assets, while GLP will focus on potential NAV and earnings enhancement by investing in development properties with asset-accretion possibilities. GLP would also receive recurrent income as the asset manager of the J-Reit. The estimated ¥100b net cash proceeds will enable GLP to recycle capital and grow its recurrent fee and dividend income. While the sale of the initial assets may leave an income vacuum in the near term, it would be partially offset by fee and dividend income. The pretax profit of the J-Reit's initial portfolio accounts for ~US$102m or 23.1% of GLP's FY12 pre-tax profit. But the house expects reinvestment of the proceeds could boost RNAV by $0.20/share. It keeps a Buy call, putting its $2.61 target under review.