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GLP's press release seems to assure that the damage impact from the earthquake/tsunami is limited to only a small proportion of their portfolio.

At the same time, GLP also takes the opportunity to engage in self-praise on their "high quality property portfolio".

they never mention the future may be impacted by the earthquake and nuclear leak problem.


companies and people may move out of the region due to multiple threat.

Will the "un-affected portfolio" still be able to generate good profits?

Negative side could be loss of business due to impaired supply capabilities in the affected region to feed its chain.
Positive side could be increased business as the re-building process kicks in, and to supply local impairments.
Unknown is if competitors are similarly affected etc. Indeed many considerations as landscape changed. Normally the strong and agile survive.

not vested

here's an article on supply chain disruption due to Jap quake. Which other Sg company will be significantly affected?

http://www.asiaone.com/News/Latest%2BNew...68055.html

Japan has 1/3 of its electricity from nuclear energy. with the incidents, some old generation of nuclear facility definitely will be abolished, but will the people allow new nuclear facility to be built? What other energy source is able to fill the void the nuclear energy left fast enough? In next 12 months, Japan will face serious electricity shortage. production output will be seriously effected. so will be logistics. No goods, what to warehouse? what to transport?

and companies could choose to move out their production to some other countries.

Their portfolio is huge, so even if the % is small, the amount is still not insignificant.

will GLP continue to insure their properties against earthquake or other natural disaster?

how much more insurance premium are they going to pay? after the huge payout by various insurance insitutions, the premium will be unbelievably high for insurance against earthquake or other natural disaster in Japan. There will be more cost for GLP to hold their properties in Japan.

If you review the very first post in this VB thread on Global Logistics Properties - made by Kazukirai mid October last year - he referred to GLP's then impending IPO as follows:

QUOTE This has got to be the most advertised IPO in recent history UNQUOTE.

Well ........... and in relation to one of my favourite subjects (although sometimes I feel in a minority of one when discussing the subject on VB) ....... we may well be imminently headed for the most advertised Preference Share/Bond Issue in recent history. Why? Because strong market rumour has it that GLP is seriously considering a chunky Singapore Dollar Perpetual Bond/Preference Share - GLP is apparently talking to investors in Singapore and Hong Kong this week.

Allegedly it will be S$ denominated, coupon in the low 5's. Seems darned low to my simple mind and I see they have quite a debt level, but perhaps GLP will lean on Sovereign Wealth Fund major-shareholding-backing and real estate nature of its business. Will be interesting to see the terms, and the take-up.

not a big fan of preferreds or perpetual bonds (which accounting wise, act as equity) especially in SGD. Cheung kong got away with 5 1/8% cost of equity and even hyflux got away with a 6%/8% cost of equity. At such low levels of cost of equity, if the business is right, it makes so much more sense to purchase the equity of the company.

On this vein, GLP's business model is starting to look a little more interesting to me. yes, it is a property company and no, it doesn't pay any dividends but those assets do generate a decent amount of profits/cash per year. I don't totally buy into the whole China growth story yet and may come back to this when their portfolio is more stable.

Possible short-term catalysts could be spinning of their Japanese assets into a REIT but this is unlikely in the near future seeing that many/(most/all?) reits in Japan trade below book value and it would be a stretch for GLP to justify selling their assets at/above book.

So not vested at the moment

With reference to bran's opening paragraph, i.e. QUOTE not a big fan of preferreds or perpetual bonds (which accounting wise, act as equity) especially in SGD. Cheung kong got away with 5 1/8% cost of equity and even hyflux got away with a 6%/8% cost of equity. At such low levels of cost of equity, if the business is right, it makes so much more sense to purchase the equity of the company UNQUOTE.

I realise I am in a tiny minority of forummers, possibly a minority of one, on the subject of Preference Shares/Bonds attractiveness. But I do believe that Preference Shares and Corporate Bonds have their time and they have their place - i.e. sometimes they are a smarter investment. As an illustrative example, please consider the performance of Hyflux's two listed entities; they listed their 6% p.a. Preference Shares second-half-April this year........

Hyflux Equity Shares........ Share Price on 26 April '11: 2.19. Share price on 30 November '11: 1.155, i.e. down 47.3%
Hyflux Preference Shares. Share Price on 26 April '11: 1.00. Share price on 30 November '11: 1.045, i.e. up 4.5%.

Hyflux equity shares are currently trading 63.1% (repeat 63.1%) below their 52-week high.
Hyflux Preference Shares are now trading 2.4% (repeat only 2.4%) below their 52-week high.

Additionally the Preference Shares paid out their six monthly 3% coupon interest several weeks ago.

I rest my case m'lud. Seriously, no gloating here - I am well down on most of my investments this year.

Vested ............ in Hyflux preference shares, not Hyflux equity shares. Now considering selling some preference shares and buying equity shares.