GPL announced earlier this week that it had signed new leases for 214k sqm in its Japanese facilities with four companies, including a 146k sqm lease in GLP Sunita, Greater Osaka with ASKUL – a leading e-commerce company and one of GLP’s largest customers in the Japanese market. The facility is 100% pre-leased a year ahead of completion and will be the customers’ largest logistics center in the country.

The remaining customers are Locondo, an ecommerce company specializing in apparel and shoes which leased 34k sqm in GLP Yachiyo, Greater Tokyo; Kato Sangyo, a food wholesale company which leased 20k sqm at GLP TomiyaSendai; and finally an e-commerce company which leased 13k sqm at GLP Naruohama, Greater Osaka.

We understand that two of these customers are new relationships for GLP. The active leasing seen in the mature Japanese market is a positive for the group, and we continue to see long-term value in GLP’s shares at current levels.

Maintain BUY with an unchanged fair value estimate of S$2.37.

Source: OCBC Research - 30 Jun 2016