Global Logistics Properties net profit jumps by 42% to US$382m

On back of higher asset values and development gains.

The logistics firm flexed its muscles in a drastically weakening macroeconomic environment, registering a strong leasing performance for 1H16.

According to a statement by GLP, the results were underpinned by healthy leasing performance in all markets, as well as its continued expansion of GLP’s fund management platform.

“Our growing fund management business provides a stable income stream while also attracting third-party institutional capital to help fund our expansion,” Ming Mei, CEO of GLP said.

GLP’s resilience was tested in the economic turmoil in China, as it maintained its leasing pace in the country. It’s Chinese leases and expansions increased by 29% yoy.

“Our confidence in our China business is underpinned by long-term, structural trends in domestic consumption and the country’s need to replace obsolete logistics facilities. Demand for our facilities is primarily based on domestic consumption which has continued to expand in spite of slower GDP growth,” Ming said.

Meanwhile, GLP said the development of modern logistics facilities remain one of its key engines of growth.

“In 2Q FY16, GLP started US$384 million of new developments (GLP share: 56%), primarily in China. In the same period, the Group completed US$349 million of developments (GLP share: 47%) which translated to US$40 million of development gains, representing an approximate value creation margin of 24%,” GLP said.

GLP also highlighted their healthy fund management platform.

“Fund management revenue in 1H FY16 increased 51% year-on-year to US$74 million. This consists of asset and property management fees of US$45 million and development and acquisition fees of US$29 million from approximately US$17 billion of invested capital,” the statement said.