GLP

GLP: Leased 26k sqm at GLP Park Beijing Capital Airport to DHL Supply Chain China. The 3PL player will lease the facilities to expand their reach across Northern China, at the site located adjacent to Beijing Airport cargo terminal and near expressways. CLSA reiterated its high conviction BUY on GLP with TP of $3.40, an upside potential of 23%, based on a 1x RNAV. The report cited GLP’s underlying warehouse demand is a beneficiary of China’s e-commerce market. CLSA expects 34% five-year CAGR with non-food B2C sales projected to rise from 6.2% of non-food retail sales in 2012 to 14.6% by 2017, passing the projected US share. GLP’s recent signing of Tencent and 360buy are strong testaments that growth is expected to continue, underpinned by the Chinese government's push to increase internet penetration which should benefit e-commerce sales. Near-term catalysts include further divestments of Japan assets into GLP J-Reit, pick-up in leasing demand in China, further cap rate compression in its Japan portfolio and the setup of a China fund as an exit vehicle for China assets.