GLP posts 64% increase to net profit in Q3

GLOBAL Logistic Properties (GLP) on Thursday reported a 63.8 per cent increase in net profit to US$184.2 million, while revenue rose 11.1 per cent to US$198.9 million.

The logistics facilities owner said its results were underpinned by higher earnings in China, development gains in Japan and GLP's entry into the US market.

China earnings were up 50 per cent driven by higher asset values, rent growth and continued lease up of developments, while Japan was up 34 per cent on the back of higher development completions.

The company signed 26 million square feet of new and renewal leases in Q3, up 22 per cent year-on-year, as strong demand for modern logistics facilities continues to be driven by long-term, structural trends in domestic consumption, it said.

GLP's average lease ratio remained unchanged quarter on quarter at 93 per cent, with customer retention ratio at 69 per cent, up from 63 per cent last quarter.

GLP has also started US$826 million of new developments in Q3, meeting 55 per cent of its FY16 group development starts target.

It also completed US$516 million of developments with a value creation margin of around 27 per cent. This translated to US$67 million of development gains (representing GLP's share before tax).

Further, GLP's completion of its acquisition of a US$4.7 billion portfolio (through GLP US Income Partners II) also helped to boost its performance.

At the time of the acquisition, two-thirds was contracted to be syndicated to China Life and two global institutional investors. This is expected to close in April 2016 upon the receipt of US regulatory approvals. Additional investors are expected to join in 2016, with GLP retaining a stake of less than 10 per cent.