Shares of Singapore’s Global Logistic Properties (GLP) (GLPL.SI) rose as much as 2.1% on Tuesday after the company said it was teaming up with China Investment Corp to buy 15 logistics facilities in Japan for US$1.6 billion ($2.09 billion).
Analysts said the acquisition is positive for GLP as it is value accretive and could lead to more collaboration with China’s sovereign wealth fund.
At 9:38 a.m., GLP shares were up 1.8% at $1.67, outperforming the broader Straits Times Index <.FTSTI> which was 0.1% higher.
CIC and GLP will each take a 50% stake in a joint venture that will buy the properties from LaSalle Investment Management, GLP said late on Monday. The deal is the largest real estate transaction in Japan this year.
Citigroup raised its target price on GLP stock to $2.72 from $2.67 and maintained its buy rating, citing an estimated net operating income (NOI) yield of 5.9% for the Japan assets acquisition.
The move will also enlarge GLP’s portfolio in Japan to a gross floor area of 3.6 million square metres (sq m) from 2.8 million sq m, helping it to widen its lead over Prologis, the runner-up in Japan’s market with 2.8 million sq m, Citi said.
J.P. Morgan, which has an overweight rating on GLP, also noted that the company now has three sovereign wealth funds among its partners -- Government of Singapore Investment Corp, Canada Pension Plan and CIC.
This demonstrates strong long-term support for GLP’s platform and business, J.P. Morgan said.
Good performance. Wishing for another good years to come.
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