GLP

GLP: Penetrated into the US market with a 55/45 partnership with GIC, acquiring a US$8.1b industrial portfolio which comprises total gfa of 117m sf (11m sm) across 36 major submarkets. GLP will fund the initial equity commitment of US$1.8b by cash and short-term debt and plans to syndicate its investment to other co-investors, paring down its stake from 55% to 10.0% by Aug 2015. The portfolio is currently 90% occupied with an average rental of US$4.83 psf, 7% below market rates and presents an organic growth opportunity for GLP, if the group is able to raise both factors. Demand for logistic facility in US is expected to be driven by the both online retail sales (10% CAGR in next 3-5 years) and the rising industrial production, underpinned by the growing number of firms moving their manufacturing back to the US. Supply, however, may be capped given the lack of construction in the past 5 years, which averaged 0.4% growth per year compared to the long term average of 1.7%. At $2.72, GLP is valued at a 15% discount to consensus RNAV of $3.11.