GLP announced that it will divest five whollyowned properties in Japan to GLP J-REIT for JPY38.1b (US$306m), which is in line with the properties’ fair market value as of 30 Jun 2015. The assets have a total gross floor area of 203k sqm and the group’s fund management platform will expand to US$27.4b after the transaction’s expected completion in Sep 2015.

We like that the group continues to expediently recycle capital for redeployment into future growth and projects yielding higher ROE. In particular, GLP J-REIT has been an effective long-term destination for the group’s stabilized assets in Japan and will hold an estimated US$3.4b of assets under management after this set of divestments.

GLP has also recently reaffirmed its FY16 Japanese development targets of US$980m in development starts (up 48% YoY) and US$720m of completions (12x higher YoY). Maintain BUY with an unchanged fair value estimate of S$3.07.

Source: OCBC Research - 11 Aug 2015