Friday, May 29, 2015

GLP

GLP: The logistics developer is syndicating a 45% interest in GLP US Income Partners 1 for US$1.47b or 1x P/B, to three investors, of which two are leading global institutional investors from Asia and one from US. This will pare down its stake from 55% to 10%.

GLP made its foray into the US market in Dec '14, setting up an initial 55/45 fund with GIC, which promptly acquired a US$8.1b portfolio, comprising a total gfa of 115m sf of logistics properties across 36 major markets, with an occupancy rate at 92%, and rising to 94% within next year.

Upon completion targeted in in 2QFY16, GLP will book an estimated divestment gain of US$30m. In addition, the group will swing from a net debt of US$1.4b (16% gearing) to a net cash position. This would enable the group to lever up (30% target gearing) to fund an aggressive US$8b development pipeline over FY16-18 and roll out its fund management platform in China.

Based on street estimates, GLP's core net profit is forecasted to grow by 30% in the current year, mainly driven by robust leasing demand in all its core markets amid rising rentals, underpinned by the projected 30% and 92% surge in development starts and completion in FY16.

Bloomberg consensus has 18 Buy and 1 Hold ratings, with average 12-month TP of $3.23. The stock remains on Market Insight's Growth portfolio.

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