Global Logistic Properties (GLP)

[Nick]

GLOBAL LOGISTIC PROPERTIES MAKES STRATEGIC INVESTMENT IN SECOND LARGEST MODERN LOGISTICS FACILITY PROVIDER IN CHINA

1 Enters into binding agreement to acquire 19.9% of Shenzhen-listed Shenzhen Chiwan Petroleum Supply Base Co., Ltd. (“SCPSB”), the parent company of BLOGIS, the second largest modern logistics facility provider in China for HK$539 million

2 Presents long term strategic benefits for both GLP and BLOGIS

http://info.sgx.com/webcoranncatth.nsf/V...10035FCA2/$file/GLP_Proposed_Acquisition_PR.pdf?openelement [Press Release]

Not vested

[Musicwhiz]

Business Times - 25 Dec 2010

GLP's China deal prompts 'buy' calls

HK$539m price for strategic stake in logistic facilities firm reasonable; deal will also create synergies: analysts

By FELDA CHAY

analYSTS have given the thumbs-up for Global Logistic Properties' (GLP) acquisition of a strategic 19.9 per cent stake in Shenzhen Chiwan Petroleum Supply Base Co (SCPSB).

They say that the HK$539.2 million (S$90 million) consideration is reasonable and that the deal will create synergies for the two companies.

SCPSB is the parent of China logistic facilities player BLOGIS - the No 2 provider of such properties in the country after GLP.

The HK$539.2 million price tag, which works out to HK$11.75 per acquired share, is a 1.4 discount to SCPSB's HK$11.92 closing price on Dec 21.

The stake vendor is Offshore Joint Services (Bases) Company of Singapore, a joint venture between JTC Corporation and Australia's Toll Holdings Ltd - a transport and logistic services provider in Asia.

JP Morgan said in a research note that the purchase price is equivalent to 3,288 yuan (S$645) per square metre (psm) on an enterprise value (EV) basis, which is similar to GLP's book value of its China portfolio (3,279 yuan psm).

EV is a measure of a company's value that takes into account the acquired firm's debt, minority interest, preferred shares, and total cash and cash equivalents.

And this is just looking at BLOGIS's portfolio, said JP Morgan. SCPSB also owns businesses in the offshore petroleum logistic and offshore engineering sectors.

'The SCPSB acquisition would add to the proposed acquisition of a 53 per cent stake in another major developer of modern logistics facilities in China and further cement the group's leadership position in China,' said JP Morgan. It has kept its 'overweight' call on GLP and target price of $2.90.

Citi Investment Research said that the acquisition shows the GLP management's 'ability at acquiring prime logistics properties at reasonable cost'.

Citi added that the deal will link up China's two largest modern logistic facilities providers, and create synergies between them even though the deal is unlikely to significantly bolster GLP's earnings. According to GLP's Thursday announcement, SCPSB reported a net profit of 112 million yuan in the last fiscal year, with a net profit margin of 34 per cent.

Said Citi: 'Although the initial net asset value/earnings impact does not look significant, we believe their cooperation should help the combined group dominate their market share in China.

'This would make it difficult for potential newcomers, including ProLogis which could re-enter the China market after February 2011, to catch up with GLP's scale in China.'

GLP has a non-compete arrangement with US-based ProLogis that prevents the latter from buying and building logistic facilities in China until after February next year.

Citi has a 'buy' call on the stock and price target of $2.80.

GLP said that it will use the proceeds from its recent initial public offering (IPO) to pay for the acquisition.

BLOGIS owns 12 projects in cities such as Shanghai, Tianjin and Chengdu. Of these, six are completed projects with a total gross floor area (GFA) of 620,000 sq m, while two projects with a total GFA of 160,000 sq m are currently under construction. The remaining four are land parcels with a planned GFA of 370,000 sq m.

GLP - whose majority shareholder is the Government of Singapore Investment Corporation - raised $3.9 billion in its October IPO, making it Singapore's largest since Singapore Telecommunications listed in 1993.

In November, GLP announced that net profit for its second quarter more than trebled to US$85.4 million from a year ago. ago. This came on the back of higher rental income as it increased its leasable space in China. A revaluation gain and a stronger yen also helped to push up earnings.

Revenue for the period ended Sept 30 increased 14 per cent to US$113.3 million from $99.8 million.

Yesterday, GLP's shares closed up 0.9 per cent, or two cents, at $2.18

[Nick]

GIC’s Global Logistics to Buy China’s Airport City, WSJ Says

Global Logistic Properties Ltd., a unit of Singapore’s investment fund, Government Investment Corp., is in talks to buy a controlling stake in China’s Airport City Development Co., the Wall Street Journal said, citing people familiar with the matter.

Airport City Development, in which Beijing Capital International Airport holds a 40 percent stake, is solely responsible for air-side cargo and warehouse facilities at Beijing Capital International Airport, the newspaper said.

An announcement is due this week and one person said GLP may pay as much as S$300 million ($233 million) in cash and an unspecified number of shares, the WSJ reported.

http://www.bloomberg.com/news/2011-01-04...-says.html

(Not Vested)

[Stocker]

We have a good records of over paying for overseas acqusitions, eg;
Dao Heng bank, Optus Australia , Thai Danu bank, Shin Corp....................... , so will this be the excetional ?

[Nick]

GLOBAL LOGISTIC PROPERTIES CEMENTS ITS POSITION IN CHINA’S FAST-GROWING AIR-CARGO BUSINESS SEGMENT THROUGH BEIJING’S AIRPORT CITY DEVELOPMENT

http://info.sgx.com/webcoranncatth.nsf/V...E0053543E/$file/ACL_Press_release.pdf?openelement [Press Release]

http://info.sgx.com/webcoranncatth.nsf/V...E00538452/$file/ACL_Presentation.pdf?openelement [PPT Slides]

http://info.sgx.com/webcoranncatth.nsf/V...E00538452/$file/ACL_Presentation.pdf?openelement [SGX Announcement]

Any comments haha ?

(Not Vested)

[Musicwhiz]

So GLP is paying part of the purchase with its own "flesh"?

Business Times - 05 Jan 2011

GLP buys key stake in China's Airport City for 2.48b yuan

53% stake to be paid in cash and shares at $2.1581 apiece

By LYNETTE KHOO

GLOBAL Logistic Properties (GLP) said late yesterday that it would buy a 53 per cent effective interest in China's Airport City Development Co Ltd (ACL) in a cash-cum-shares transaction worth about 2.483 billion yuan (S$485 million).

The arrangement will involve two steps. GLP will acquire from Prosper Line Investments and Great Ocean Overseas Holdings their combined effective stake of approximately 53 per cent in ACL, and then subsequently dispose of assets that are non-core to GLP.

The closing consideration of 1.4 billion yuan for the core assets of ACL will be settled with 30 per cent cash and 70 per cent shares, GLP said.

A cash payment of 592 million yuan will also be paid at closing to the sellers - representing the value of a non-core subsidiary of ACL that has been disposed prior to closing. The balance of the consideration - to be paid once the non-core assets are disposed - of approximately 488 million yuan will be paid in instalments.

The GLP shares will be issued at the price of $2.1581 per share, which is the five-day volume weighted average price prior to Jan 4, 2011, or the date of the sale and purchase agreement. The cash payment will be funded from the proceeds of GLP's initial public offering.

Established in December 2004, ACL is the sole developer of air cargo handling and bonded warehouse logistic facilities for Beijing Capital International airport.

It owns about 800,000 square metres of gross floor area in the Beijing airport, divided into five main function zones: air cargo terminals, an express centre, a customs supervision area, a bonded logistic centre and an office complex.

According to its website, ACL is also actively involved in the planning and construction of its parent firm's project called Capital Airport City, which is a multifunctional mega-structure at the Beijing airport that will integrate air transport, logistics, shopping malls, tourism and leisure centres, and industrial development.

Last month, GLP also announced that it will acquire a 19.9 per cent stake in Shenzhen Chiwan Petroleum Supply Base Co Ltd, the parent company of BLOGIS, the second largest modern logistics facility provider in China after GLP. The HK$539 million (S$89.1 million) deal prompted 'buy' calls from analysts, who foresee synergies between China's two largest modern logistic facilities providers and earnings accretion from the deal.

Yesterday, GLP shares fell two cents to $2.14.

---------------------------------------------------------

The Straits Times
Jan 5, 2011
GLP to buy stake in Beijing airport firm

GLOBAL Logistic Properties (GLP) - a recent mega local listing - is acquiring a majority stake in a Beijing airport firm for 2.48 billion yuan (S$482 million). The sellers are Prosper Line Investments and Great Ocean Overseas Holdings.

An investment banker told The Straits Times that the deal to acquire a 53.1 per cent stake in Airport City Development is not new and has been in the works for some time.

Airport City is the sole developer of the air cargo handling and bonded logistics facility at the Beijing Capital International Airport.

In its prospectus lodged last September, GLP revealed it had entered into a 'framework agreement' in August with a third party to buy the 53.1 per cent stake. It had signalled in its prospectus a lower purchase price of about US$335 million (S$430 million), with 70 per cent of the deal financed by the issue of new shares and 30 per cent in cash.

In its statement last night, GLP said the new shares will be priced at S$2.1581 apiece.

Mr Jeffrey Schwartz, its deputy chairman and chairman of the executive committee, said: 'This is an important transaction for us, allowing us to take our position in the growing air cargo industry of China to a higher level.'

The investment advances GLP's strategic position as a provider of air-cargo logistics facilities in China. The properties involved will be GLP's first air cargo facilities to be sited within an airport perimeter. Previously, the company's air cargo properties have been located in the vicinity of airports but outside the perimeter.

The facilities are located beside the second runway of the airport in the newly setup Beijing Tianzhu Free Trade Zone. They currently serve major air freight companies that are existing clients of GLP in other cities and markets.

GLP, which raised US$2.9 billion from its IPO in October last year, is on an acquisition trail in China.

Citi Investment Research said it believes the 'commencement of GLP's acquisitions in China should be a strong catalyst to drive a continuous re-rating on the stock'. It has a 'buy' recommendation with a target price of $2.80.

GLP shares closed two cents down at $2.14 yesterday.

GABRIEL CHEN

[Musicwhiz]

Business Times - 06 Jan 2011

GLP eyes assets in China 2nd-tier cities

It has just acquired a 53% stake in Beijing's Airport City Development

By LYNETTE KHOO

GLOBAL Logistic Properties (GLP), which just bought into China's Airport City Development Ltd (ACL), is eyeing more assets that will be up for grabs as China's fragmented modern logistics market consolidates.

And it is more inclined to paying in cash rather than equity for future acquisitions.

'We believe in the next three to five years, there is opportunity to establish a further leading position. The market is so fragmented that in the next three to five years, there will be some consolidation going on and we are just playing that role now,' GLP chief executive Ming Z Mei told reporters yesterday at a briefing on the ACL deal.

'We are looking at new cities. We are currently looking at Wuhan, Zheng-zhou, Xiamen - basically the second-tier cities,' Mr Mei added.

GLP's latest acquisition in first-tier city Beijing was a result of a five-year courtship, Mr Mei told reporters at yesterday's briefing.

Its shares hit the top volumes chart yesterday, rising two cents to $2.16 at closing.

ACL holds 17 completed buildings with gross floor area of 280,000 sq m and 26 properties to be developed with a GFA of 513,000 sq m. These will be GLP's first air cargo facilities to be sited within an airport perimeter.

The cash-cum-shares transaction worth about 2.5 billion yuan, announced late Tuesday night, will give GLP a 53 per cent effective interest in ACL, the sole developer of the airside cargo handling and bonded logistics facility at the Beijing Capital International Airport (BCIA).

The two vendors are British Virgin Island vehicles linked to Chinese parties.

After disposals of ACL's non-logistic assets and other non-core land and properties that GLP does not wish to own, the net consideration will be 1.4 billion yuan, to be settled with 70 per cent in shares and 30 per cent in cash.

The issuance of shares is expected to result in a 2.8 per cent dilution.

Mr Mei said GLP hopes to complete the transaction in a couple of weeks, after which GLP will hit the ground running at ACL in its daily operations.

GLP will also take on majority board representation in ACL - four out of seven board seats - while ACL's second largest shareholder, Capital International Airport Holdings, will maintain three seats.

Jeffrey Schwartz, chairman of the executive committee at GLP, hailed the ACL acquisition as 'a rare opportunity' to gain control of a strategic asset in BCIA, the third largest airport in the world by passenger traffic and the second largest in China by cargo turnover.

On a pro forma basis, it will raise GLP's net tangible assets per share from US$1.309 as at Sept 30, 2010, to US$1.3128 after the transaction.

ACL's facilities are located beside the second runway of BCIA in the newly set-up Beijing Tianzhu Free Trade Zone, and currently serve major air freight companies that are existing clients of GLP in other cities and markets, such as FedEx.

While ACL has gone into formal operations for only two weeks since Dec 20, its rental rate is three times more than the rates for normal warehouses. GLP has hence bought the stake at an attractive price using the usual warehousing price matrix, Mr Mei noted.

'We think that there is upside to the rents and there's tremendous upside to the project,' Mr Schwartz added.

GLP, whose major shareholder is Government of Singapore Investment Corporation (GIC), had on Dec 22 also agreed to acquire a 19.9 per cent stake in Shenzhen Chiwan Petroleum Supply Base (SCPSB).

The HK$539 million deal also gives GLP two board seats to a 11-member board on SCPSB, a Shenzhen-listed firm that owns BLOGIS, which is the second largest modern logistics facility provider in China after GLP.

BLOGIS' facilities are mostly in key first-tier cities or major logistic hubs in China. GLP is also open to undertaking joint ventures with BLOGIS to enter new cities, or to go solo, Mr Mei said.

[Nick]

Global Logistic Properties achieved US$82.1 million net profit
for the Quarter ended December 31, 2010

- Healthy revenue growth of 12.9% to US$125.2 million for 3Q FY2011

- EBIT (excluding revaluation)increased 36.5% to US$95.7 million for 3Q FY2011

- Continuing strong trend in new leases of approximately 300,000 sqm signed in China for 3Q FY2011

- Development starts of 0.9 million sqm GFA for the 9 months ended December 31, 2010

http://info.sgx.com/webcoranncatth.nsf/V...6007FB52B/$file/News_Release_3QFY2011.pdf?openelement [Press Release]

(Not Vested)

[ssian]

Any idea when will be their dividend payout month ?

[Nick]

Any idea when will be their dividend payout month ?

There is no guarantee that there will be any dividend payout in the first place. GLP might choose to retain all of its profits for growth/development.