Singapore wealth fund GIC’s logistics unit GLP surged as much as 12% on its debut on Monday, as Asia’s ninth-biggest public offering this year attracted investors due to its China exposure.

Global Logistic Properties (GLP) (GLPL.SI) is set to raise $3.9 billion ($3.01 billion) if it exercises its greenshoe option, making it Singapore’s second biggest IPO since SingTel’s (STEL.SI) $4 billion float in 1993.

 

“GLP offers potentially higher growth prospects with their property portfolio not centered in Singapore alone,” said Moh Tze Yang, an analyst at SIAS Research.

 

“GLP’s prospects in China look strong with industrial production a key growth driver behind China’s economy.”

 

GLP, which owns industrial and logistic properties in China and Japan, is the first listing of a firm majority-owned by the Government of Singapore Investment Corp (GIC) (GIC.UL),  one of the world’s biggest sovereign wealth funds.

 

By the midday break, GLP shares traded at $2.16, with over 337 million shares changing hands — compared to an IPO price of $1.96, a gain of 10%. It hit an intraday high of $2.19.    

 

The share offering from GLP takes place against a backdrop of a booming Asia IPO market. Several large IPOs in Asia take place in coming weeks and these include AIA, the Asian life insurance arm of American International Group (AIG.N), which aims to raise up to US$20.5 billion ($26.7 billion) and a proposed US$4.2 billion offering by Malaysia’s Petronas Chemicals.

 

This underscores the ample liquidity in Asian equity markets, which have seen solid gains this year, helped by a pick up in economic growth.

 

Singapore’s benchmark Straits Times Index <.FTSTI> has risen 10% so far this year, compared with a 11% gain in the MSCI index of Asia-Pacific stocks excluding Japan.

 

GLP is the first of two large IPOs that make their debut in Singapore this week — Mapletree Industrial Trust, which could raise as much as S$940 million, starts trading on Thursday.

    

UPBEAT OUTLOOK

The unit of GIC, led by former ProLogis CEO Jeffrey Schwartz, owns over 290 logistics properties across China and Japan, making it well-positioned to ride on the coat tails of China’s industrial production boom and economic growth.

 

“They’ve also gotten the CEO on board and several other key members from the Prologis team. In terms of the management credentials, I think it’s quite strong,” said Vikrant Pandey, an analyst at UOB Kay Hian.

 

Shwartz, who was widely credited for turning ProLogis into the world’s biggest warehouse firm, got involved with GLP when it was formed out of the Japanese and Chinese operations of ProLogis, which GIC purchased for US$1.3 billion in December 2008. 

 

Schwartz and co-founder Ming Mei, ProLogis’ former head of China and current GLP CEO, rapidly expanded the China business to become the number one player there.

 

GLP’s customers include Wal-Mart China, DHL and FedEx Corp (FDX.N).

 

“The growth is going to come from China, which accounts for about 30% of their portfolio. So it’s a medium to long- term play on the growth in China, funded by the high yields from Japan properties,” UOB Kay Hian’s Pandey said.

 

Citigroup (C.N) and JPMorgan (JPM.N) were the joint global coordinators and issue managers for the share offer.