GLP's net profit down 17.3% to $281.7m

Blame the 12.4% rise in property-related expenses.

Global Logistics Properties reported a 17.3% slump in its profit for the period to US$206.9m ($281.7m) despite the 26.7% increase in revenue to US$261.8m.

The decline in net profit is brought about by the 12.4% rise in property related expenses to US$42.97m and the 51.7% decline in other income to US$625,000 from $1.3m.

Meanwhile, the group's new and renewal leases increased 35% year-on-year to 3.3m sqm, with approximately 72% of customers renewing their leases with GLP.

Additionally, rent growth remained healthy, with the group recording 5.2% growth in same-property net operating income and 7.7% rent growth on renewal leases.

GLP’s stabilized logistics portfolio lease ratio in China was 84%, down from 85% last quarter, driven by a lower lease ratio of development properties that stabilized in 1Q FY18. As a result, the Group’s average lease ratio stood at 90% as of 30 June 2017, 1% lower quarter-on-quarter.

GLP’s development program is driven by customer demand. In 1Q18, the group started US$226m and completed US$252m of development projects. This represents 11% and 15% of group development starts and completions targets, respectively.

However, the development is historically lower in the first quarter due to seasonality but generally picks up in the second half of the financial year. The company continues to exercise strong capital discipline and expects to meet its FY18 global development targets of US$2.2b of development starts and US$1.7b of development completions.