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.
Syndication of US fund interest oversubscribed
GLP recently announced that a subsidiary of the group, New GLP Holdings LLC, 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. To recap, GLP had acquired the US$8b logistics portfolio in the United States in Dec 2014 with the intention of injecting the assets into its fund management platform, and this exercise is in line with its stated intention to ultimately syndicate its stake and pare down its holdings from 55% to 10% while GIC continues to hold a 45% stake. The US logistics portfolio consists of 115m sq ft of high quality logistics assets in locations with higher barriers to entry and 26 out of 29 markets have populations above 1m which are ideal for last mile e-commerce deliveries. As at end Mar 2015, the portfolio was 92% leased.
Agreed price in line with GLP’s acquisition price plus earnings
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, including approval from the Committee on Foreign Investment in the United States. We like that GLP’s 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.
GLP recently announced that a subsidiary of the group, New GLP Holdings LLC, 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. To recap, GLP had acquired the US$8b logistics portfolio in the United States in Dec 2014 with the intention of injecting the assets into its fund management platform, and this exercise is in line with its stated intention to ultimately syndicate its stake and pare down its holdings from 55% to 10% while GIC continues to hold a 45% stake. The US logistics portfolio consists of 115m sq ft of high quality logistics assets in locations with higher barriers to entry and 26 out of 29 markets have populations above 1m which are ideal for last mile e-commerce deliveries. As at end Mar 2015, the portfolio was 92% leased.
Agreed price in line with GLP’s acquisition price plus earnings
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, including approval from the Committee on Foreign Investment in the United States. We like that GLP’s 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.
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