China to drive growth
We acknowledge the risks of higher competition among logistics facilities and land supply constraints but do not expect them to undermine GLP’s market leader position. The combined spending on logistics facilities by GLP, Alibaba and JD.com is less than 5% the required amount for China’s logistics space per capita to equal a third that of the US. As such, we expect demand to more than absorb the oncoming supply of logistics space. In the same vein, the land supply constraints are mitigated by the strategic partners, such as SOEs, COFCO and Sinotrans, which are not only likely to increase land supply but leasing demand as well. We believe GLP will maintain its market leader position in China through the fostering of strategic partnerships and enhancing customer stickiness.
AUM - CAGR of 28%
We expect GLP’s AUM to post a CAGR of 28% over FY15-17 through the injection of stabilised assets into funds/REITs and the investment of committed capital from its development funds. This will be a positive as it not only builds its management fee platform but also enables capital to be recycled into its growing China portfolio.
Reiterate Add
GLP is trading at a 19% discount to RNAV, about 1 s.d. deeper than its historical mean discount of 12%. Additionally, we expect GLP’s RNAV to grow 9% and 2% in FY16 and FY17, respectively, driven by growth in its China assets and value creation from an enlarged fund management portfolio.
SURVEY
Tuesday, June 24, 2014
Wednesday, June 11, 2014
Taken By Sheng Siong!
Sheng Siong Group (SSG) made the news once again albeit on a more positive note. This time, SSG is on the offensive side as they exercised an option to take over a commercial property. The three story HDB commercial property is located in Tampines Central and will be bought for $65 million.
The property has a gross floor area of approximately 3,876 square metres and is currently leased to different tenants. SSG will be taking over the occupied spaces progressively based on the expiry of the existing leases. Leases will start to expire this year with the last expiring in 2018.
In the first phase, SSG will begin to operate its store by 2015 which will occupy 910 square metres. It is noted that Giant currently occupies part of the property but as part of the sale, SSG will be taking over that portion once leases expire.
This plan is part of SSG’s strategy to expand its network in areas without its presence. Currently, SSG’s presence in the East side of Singapore is weak as they are mainly concentrated in the Bedok area.
The proposed plan will enable SSG to quickly scale up its operations in the matured Tampines area. They will also be able to take over Giant’s clientele as they will be replacing them in that area. It will allow SSG to take out its competition and expand its presence concurrently.
The property has a gross floor area of approximately 3,876 square metres and is currently leased to different tenants. SSG will be taking over the occupied spaces progressively based on the expiry of the existing leases. Leases will start to expire this year with the last expiring in 2018.
In the first phase, SSG will begin to operate its store by 2015 which will occupy 910 square metres. It is noted that Giant currently occupies part of the property but as part of the sale, SSG will be taking over that portion once leases expire.
This plan is part of SSG’s strategy to expand its network in areas without its presence. Currently, SSG’s presence in the East side of Singapore is weak as they are mainly concentrated in the Bedok area.
The proposed plan will enable SSG to quickly scale up its operations in the matured Tampines area. They will also be able to take over Giant’s clientele as they will be replacing them in that area. It will allow SSG to take out its competition and expand its presence concurrently.
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