GLP REIT is the target of the first batch of high-quality logistics warehousing REIT with successful landing and expansion process, and the value of its asset operation and management platform is constantly increasing. At present, the location layout of the underlying assets under management of fund products is relatively good, and the high-quality underlying assets are expected to support the sound operating returns in the future and still have a certain long-term investment value. however, in the short term, its managed assets also have to face the problem of increasing warehousing vacancy rate in the process of economic recovery and climbing. We estimate that GLP REIT will be able to achieve the available allocation amount of 345 million yuan per share in 2023-24-25. We calculate the reasonable target price of 4.50 yuan per share of the fund and adjust it to the investment rating of "overweight".

The performance is steady and the distribution income is good. According to the announcement of GLP REIT fund products, the total income of the fund in the first half of 2023 (including asset expansion) was 192 million yuan, which was 126 million yuan compared with the same period last year, and 3.2% compared with the same period last year. The available allocation amount was 172 million yuan, and + 22% over the same period last year. In the first half of the year, it has completed about 50% of the amount expected to be allocated for the whole year of 2023, and the performance fundamentals are solid. The cumulative dividend distribution of GLP REIT fund products in the first half of 2023 was 163 million yuan, accounting for 95% of the amount available for distribution in the current period, and the distribution income performed well.

The expansion and issuance has been successfully completed, further strengthening the value of the platform. By the end of June 2023, the number of infrastructure logistics park assets held by REIT had increased from 7 to 10, with a total construction area of 1.16 million square meters, with assets distributed in Beijing-Tianjin-Hebei, Yangtze River Delta, Bohai Economic Zone, Guangdong-Hong Kong-Macau Greater Bay Area and Chengdu-Chongqing Economic Zone, further dispersing the regional concentration of logistics and warehousing assets and strengthening the long-term operational stability of the portfolio. In addition, the successful promotion of fund-raising provides practical experience for the potential injection of high-quality assets on a larger scale in the future, and the platform channel value of asset withdrawal of fund products is further strengthened.

The performance of asset operation is under periodic pressure. Since 2023, the market development of the logistics warehousing industry has slowed down, the new supply has increased and the recovery of rental demand has lagged behind, which has put some pressure on the vacancy rate and rental performance of warehousing. By the middle of 2023 (including expanded assets), the number of effective market-oriented tenants of the underlying assets of GLP REIT was 74, and the average rental rate at the end of the period was 87.58%, of which the average rental rate of initial public assets was 92.09% (down 2.09% from the end of 2022), and the average rental rate of newly purchased expanded assets was 80.56% (6.9% lower than that at the end of 2022). The effective average rental price of the assets under management of the fund is 38.52 yuan / square meter / month, of which the average rental price of the initial issue assets is 45.05 yuan / square meter / month (an increase of 1.4% over the end of 2022). The average rental unit price of newly purchased and expanded assets is 26.90 yuan / square meter / month (4.3% higher than that at the end of 2022). Fund managers actively deal with the issue of vacancy rate. According to the fund announcement, as of the release date of the fund semi-annual report, GLP (Chongqing) City Distribution and Logistics Center has completed the lease intention agreement with customers to sign a formal lease agreement, which will further increase the overall average time-point occupancy rate of GLP REIT's 10 warehousing projects to 90.55%, and the fundamentals of asset management are expected to improve steadily.

Risk factors: slow macroeconomic growth or fluctuations in the tenant's industry lead to the risk of a decline in the rental rate or rent reduction; after the expiration of the existing lease, if the renewal is not as expected or the current intention of the lease fails to land, there may be the risk of a decline in the rental rate; the risk of increased supply of warehousing and logistics infrastructure around the project site and intensified competition.

Profit forecast, valuation and rating: as the first batch of high-quality logistics warehousing REIT target of GLP REIT, the value of its asset operation and management platform is increasing. At present, the location layout of the underlying assets under management of fund products is relatively good, and the high-quality underlying assets are expected to support the sound operating returns in the future and still have a certain long-term investment value. however, in the short term, its managed assets also have to face the problem of increasing warehousing vacancy rate in the process of economic recovery and climbing. We expect that GLP REIT will be able to achieve an available distribution amount of 345 million yuan in 2023 REITs 24 / 25. With reference to the current cash distribution rate of 3.95% for property rights GLP, and considering the pressure of vacancy rate faced by logistics assets in the short term, we conservatively give the fund product an expected cash distribution rate of 4.00% in 2023, and calculate the reasonable target price of the fund. Adjust to the investment rating of "overweight".