Three Things To Like About Global Logistic Properties

GLPThe name says it all – Global Logistic Properties (SGX: MC0). The company is global; it is involved in logistics or support services, and it is a play on the property market. The company, which through a recently signed lease agreement in Brazil, has reinforced its presence in South America to add to its existing logistics facilities in China and Japan.

That is the first thing to like about Global Logistic Properties – its wide geographic presence. The company, which designs, builds and manages distribution facilities, currently generates 60% of its revenues from Japan, just under 40% from the People’s Republic of China and the remainder from Brazil. The recent Brazilian deal should increase the company’s exposure to and revenues from the seventh largest economy in the world.

The second thing to like about GLP is its high Return on Equity, which has been achieved without taking on excessive debt. At 1.7, its Leverage Ratio is about average for Singapore’s blue chips. The median Leverage Ratio for the 30 companies that make up the Straits Times Index (SGX: ^STI) is also 1.7.

Global Logistic Properties, which only floated on the Singapore market in 2010, has delivered a total annual return of 10.7% over the last three years. That is the third thing to like about GLP. Over 90% of the return has come from capital growth since the company has only recently started to pay a dividend. Currently, the payout ratio is a modest 20%, which would suggest that the company is not overreaching in rewarding shareholders.

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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 Director David Kuo doesn’t own shares in any companies mentioned.