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An Insight into Global Logistic Properties

Global logistic properties logo As its name suggests, Global Logistic Properties (“GLP”) Limited (SGX: MC0) is the leading provider of modern logistics facilities with their presence concentrated among 3 countries – China, Japan and Brazil. In layman terms, GLP provides new warehouse storage with many value-added solutions, including customization of the site according to an individual customer’s requirements.

In the past few weeks, there has been a flurry of announcements made by Global Logistic Properties regarding the grant of share awards for the directors and notifications on increased stakes in their subsidiaries etc.

Two announcements that stood out were about the leasing of a huge area (23,000 sq metres) to Lefeng, a leading cosmetics e-commerce company in China, and the construction of large-scale logistics facility in Greater Osaka.

With the rapid growth of domestic consumption and e-commerce in China, GLP sees strong demand for strategically-located logistics space from the retail industry. Research firm Euro monitor forecasts that China’s online cosmetics sales will increase more than three-fold from RMB37 billion (S$7.73 Billion) in 2012; creating a need for GLP facilities in the future.

The Greater Osaka development is a 50/50 joint venture between GLP and the Canada Pension Plan Investment Board under the GLP Japan Development Venture. Strong demand is expected due to very low vacancy rate of 1.5% for large multi-tenant facilities. The facility is also situated close to the Interchange and the Expressway for easy transportation.

Foolish Bottom-Line

By expanding in markets where GLP already has a leading position, GLP continues to increase the barriers of entry for its competitors. The results are also showing – Revenue and Net profit for FY 2013 rockets up 14% and 27% as compared to last year respectively. It will be interesting to watch how the company continues to compete in the market.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.   Motley Fool Singapore contributor James Yeo doesn’t own shares in any companies mentioned.