GLP

GLP: Will be acquiring a sizable industrial portfolio in US from Industrial Income Trust for US$4.55b ($6.2b), based on a cap rate of 5.6%

The deal would boost GLP's footprint in US by 50% and consolidates its position, after one year of entry, as the second largest logistics property owner and operator behind US-listed Prologis.

The 287 target properties have an average age of 15 years and occupancy rate of 93%, with weighted average lease expiry of ~5.5 years. They range across 20 major submarkets, with the largest ones being Los Angeles, Metro D.C. and Pennsylvania.

In addition, the target portfolio average rent of US$4.79 psf would raise GLP's overall rental rate marginally to $4.77 (+0.2%) across the 173m sf of net lettable area.

To be completed by Nov '15, GLP’s initial commitment of US$1.9b for the entire stake will be funded by cash on hand of US$2.3b and existing credit facilities.

Post syndication, GLP will pare its stake down to 10% by Apr '16. Demand from major institutional investors is strong and the group is currently negotiating with several new and existing capital partners.

GLP's target 10% stake is expected to generate compelling returns within the first year of investment, including share of operating results and fund management fees. Post transaction, the US will represent 6% of the group's net asset value.

GLP is a constituent on Market Insight's Growth portfolio. Consensus is generally bullish on the counter with 16 Buy and 1 Hold ratings, and average 12-month TP of $3.20.