Global Logistics Properties profits dip 12% in Q2

GLP China was the biggest loser.

In spite of a strong leasing momentum in China, Global Logistics Properties’ profits from April to June dipped 12% yoy to US$179.4m due to a smaller share of GLP China’s earnings.

According to CIMB, this was following the sale of a 24.4% stake in GLP China to a consortium of investors, along with an income vacuum from the sale of assets to GLP J-REIT. Excluding these and other adjustments, profits would have been US$61m, +27% yoy.

“Completions are expected to catch up in 2Q, with another 0.4-0.5m sq m GFA built, on track to reach its FY15’s target of 2.4m sq m. More importantly, the recent US$583m 49/51 tie up with China Materials Storage and Transportation Development Company (CMSTD), as well as taking a 15.3% stake in the latter for US$324m, will give GLP access to an additional 9m sq m of landbank. In Japan, leasing demand continued to improve, with rents trickling higher qoq,” noted CIMB.

Here's more from the report:

There was strong leasing momentum in China in 1Q, with 0.53m sq m of leases contracted amid a 6.2% yoy rental rate hike and stable occupancy of 90%. 1Q development starts of 1.36m sq m accounted for 39% of its FY15 target.

Robust consumption demand in Brazil underpins the demand for logistics warehouse space. With the purchase of BR Properties assets completed, GLP will likely leverage on this platform to further add to its landbank.