[앤츠랩] Distribution Center Half Coupang Lease… The place where the beneficiary came to mind

Shutterstock

▶ Half of 11 distribution centers are rented in Coupang
▶Long-term rental of new buildings, potential for profitability improvement
▶A world that delivers anything, logistics is big anyway

=The news that Coupang will be listed on the New York Stock Exchange is a hot topic every day. In Korea, the search for beneficiaries is in full swing. One of the items that cannot be missed is ESR Kendall Squares.

= Here, REITs refer to real estate investment companies. There are companies that own and do business with several real estates, and investors invest indirectly in this company. Some of these are listed (currently about 20), so you can buy and sell them on the stock market like any stock. ESR Kendall Squares is one of them.

=ESR Kendall Square is a joint venture between ESR, the largest logistics real estate company in Asia-Pacific, and Kental Square Partners, a Korean management company. We split at Proposis, the world’s No. 1 logistics real estate company on both sides, and we met again.

=Business model is simple. You buy a distribution center and lend it. Including Anseong, which is scheduled to be incorporated in June, only 11 distribution centers are owned. Of these, Coupang borrows three of the largest (Goyang, Anseong, and Bucheon). Only about 50% of Coupang is. That’s why it was tied up as a beneficiary.

=The logistics market is really hot these days. The e-commerce market is constantly growing. That’s why Coupang’s ransom jumped to 50 trillion won in just 10 years. Coupang prepared to sell more while WeMep and Timon were focusing on what they would sell. We poured astronomical money into distribution centers and delivery systems. Hundreds of billions of deficits, fingering. But the winner is Coupang.

Coupang

=Recently, the battlefield is expanding with fresh foods, but in the end, the key to delivery is’fast’ and’exactly’. It is important to secure a base, that is, a distribution center, as close as possible to where people live.

=It’s not just big companies like Coupang and Lotte that do e-commerce transactions. Even looking at the numerous online shopping malls, the size is incomparable to the past. Let’s say you opened an online shopping mall. Initially, the boss takes the order directly, packs it, loads it, and delivers it. But what if the number of customers increases? I can’t. That is why 3PL (3rd party logistics) appeared. It is a form of entrusting logistics tasks such as packaging and delivery to external companies. They also compete in the logistics center. I should have been to see the land before…

=ESR Kendall Squares went public in December last year. It has received great attention since the first pure logistics Ritzra listing in Korea. Unlike regular stocks, REITs tend to not fluctuate significantly even when listed. So far, the stock price has risen 13.9%. It slightly outpaced the KOSPI increase rate (11.1%).

Ants Lab

= 61.5% of the 11 distribution centers we own are less than 2 years old. In short, there are many days left to make money. It is also noteworthy that about 40% are located in urban areas, making it suitable for today’s shipping trends.

= Since the vacancy rate is less than 1%, most of the items we have are borrowed. The lease term is also long, on average 5.4 years. Considering the annual rent increase of 1-2%, the profitability is expected to improve even more. The share of borrowings (46%) is also low. It means that we can buy more distribution centers in the future.

=It is attractive, but it is burdensome to increase interest rates in the mid to long term. You borrowed money to buy a distribution center, but if the interest burden increases, your profitability will deteriorate. I don’t think there is anything to worry about now.

In conclusion, after 6 months,

Unless you hang up Coupang or Market Curly. by Ants Lab