GLP

GLP: GLP J-REIT has acquired nine assets—two from GLP at US$287m (¥28.5b) and seven from the GLP Japan Income Partners I fund (GLP owns 33.3%) at US$277m (¥27.5b). NPI yields were 5% and 6%, respectively. J-REIT will part finance with debt and equity (potentially issue up to 14.1% or 249,995 units). Given the acquisition yield of 5-6% and the trading yield of 4.6%, CS Japan research team estimates the transaction could add ~7% to the NAV and 9-10% to DPU. GLP will use proceeds to reinvest in business and subscribe to the J-REIT's placement to maintain its 15% stake. Note that it is a win-win deal for J-REIT and GLP as the latter is able to unlock value, realise fund management fee and recycle its assets into J-REIT, while acquisition will add value to the former. Although positive for J-REIT, cap rate levels have not met anticipated compression levels, therefore neutral for GLP. Overall, CS maintains OUTPERFORM on GLP as house like it as a proxy to the defensive logistics sector, with growth kicker from developments.