GLP

GLP: will commence devt of GLP Naruohama, a 110k sm large scale multi-tenant logistics facility in Greater Osaka. The total devt cost is estimated to be ¥15.7b (US$160m). Construction will begin May 2014 and be completed by Jun 2015. GLP Naruohama is the 5th devt under GLP Japan Devt Venture, a 50/50 JV btwn GLP and the Canada Pension Plan Investment Board, and brings the total invmt by the venture to ¥59b (US$603m). Mgt notes the new project is strategically located within Greater Osaka, one of Japan’s biggest consumption areas. It is an attractive mkt for logistics, with the vacancy rate for large multi-tenant facilities currently standing at a low of 1.5%. Furthermore, GLP Naruohama’s close location to a residential town will provide access to workforce. Separately, Credit Suisse remains bullish on the Japan logistics Reit sector, tips GLP J-REIT as top pick. Sees sustained external growth at GLP J-REIT supported by property acquisitions from its sponsor, with the former possibly raising capital to fund the property acquisitions in Aug or Sep 2013. This could pave the way for GLP to unlock the value of its remaining Japan logistics facilities. GLP J-REIT holds preferential negotiation rights for approx ¥300b in logistics facilities owned by GLP.