Market Pulse: Global Logistic Properties
KEY IDEA
Global Logistic Properties Ltd: US fund syndication going smoothly
GLP recently announced that it has agreed to divest a 45% syndicated interest in its US logistics portfolio (GLP US Income Partners I) to three capital partners, two of which are leading global institutional investors from Asia and one from North America. We understand that the offering was oversubscribed, and one of the Asian investors will be a new partner to GLP’s fund management platform. The agreed price of the 45% syndicated interest will be in line with GLP’s acquisition price and retained earnings, and we expect GLP to book divestments gains equivalent to the net income earned over this period. The deal is anticipated to complete in 2QFY16 upon receipt of regulatory approval. We like that management is executing strongly on its fund management platform strategy; this leverages strongly on its relationships with major institutions and its facilities management capabilities and provides a major source of capital for funding future growth. Maintain
BUY on GLP; our fair value estimate increases marginally from S$2.99 to
S$3.07 mostly due to the impact of USD-SGD appreciation on our valuation model. (Eli Lee)
Source: http://www.ocbcresearch.com/
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