Lower occupancy badgers Global Logistics Properties' China portfolio

Whilst its US portfolio remained stable.

The cards were mixed in the overseas operations of Global Logistics Properties.

According to UOB Kayhian, there was a softer performance from the China portfolio as 4Q17 lease ratio dipped 2 ppt qoq to 85% whilst retention ratio remained modest at 64%.

"This was largely attributed to higher development property completions in the quarter (approximately 1m sqm) with lower occupancies, bringing down overall numbers," the brokerage firm said.

GLP believes that China’s mid-long term outlook remains positive, and sees growing demand from the organised retail, auto parts and cold storage sectors. Cap rates remained stable at 6.3%.

Meanwhile, its US portfolio remained stable, as lease ratio stayed at 94%. GLP previously highlighted its intent to pursue acquisitions of stabilised assets in this market.

Here's more from UOB Kayhian:

Cap rate compression in Brazil, by about 39bp to reach 10.1% in 4QFY17. Management opined that Brazil could continue to see lower interest rates (single digits), underscoring higher liquidity and further cap rate compression. The Brazil investment portfolio saw stable lease ratio of 89% in the quarter (3QFY17: 89%), though negative rental reversions of 9.4% were registered.

Resilient Japan. Lease ratio was up 1ppt qoq to 98% as new/renewal leases leaped 54.5% qoq to 0.34m sqm (+100% yoy), with effective rent growth on renewals of 5.2% (3QFY17: 6.6%).