Daiwa raises GLP target to $2.59 vs $2.27

Stock Name: GLP
Company Name: GLOBAL LOGISTIC PROP LIMITED

Research House: Daiwa

Price Call: BUY

Target Price: 2.59

Global Logistic Properties’ tie-up with Haier underscores China’s pent-up demand, Daiwa says.

While no details on the initial three projects’ size or timing for completion were given, the deal highlights GLP’s ability to source domestic corporate demand for its facilities and reaffirms the view domestic Chinese entities are seeking more modern warehouse facilities, the house says.

It notes CBRE data show average China rentals for logistics facilities are up 2.9% year-to-date, while Tokyo logistic-facility vacancies decreased to 3.6% in 2Q12 from 1Q12’s 4.5%, with signs of increasing rents.

It raises its target to $2.59 from $2.27, based on parity with NAV; it no longer applies a 20% discount for the China assets. It keeps an Outperform call. The stock is up 7.7% at $2.65 after a series of large trades.