SINGAPORE - Global Logistic Properties, a provider of modern logistics facilities, reported a 52 per cent jump in second quarter earnings, driven by the continued expansion of its fund management platform.
Revenue for the three months to Sept 30, increased by 13 per cent to US$214 million from US$189 million for the year-ago quarter. This was down to the completion and stabilisation of development projects in China with increasing rents, higher management fee income from the inclusion of GLP US Income Partners II and growth in Japan, and the strengthening of the yen against the US dollar.
However, net profit for the first six months dipped 2 per cent year on year to US$376 million due to foreign exchange losses. group same-property net operating income rose 7.5 per cent in the first half year.
Said GLP CEO Ming Z Mei: "The team achieved strong results underpinned by recurring income from operations, development and fund management. Our business is supported by long-term structural trends in domestic consumption. We maintain strong investment discipline and see room for cap rates to compress further in this financial year."
GLP said its average lease ratio increased 1 per cent quarter on quarter to 92 per cent, driven by a higher lease ratio in China. Leasing demand remained stable globally, with 3.3 million square metres of new and renewal leases signed in the second quarter, up 21 per cent year on year. Rent growth on renewal leases was up 11.3 per cent globally, led by US and China. Customer retention increased 2 per cent quarter on quarter to 73 per cent.
In the second quarter, GLP started US$459 million of developments and completed US$428 million of projects, mainly in China. GLP said the new developments started in China were located in markets that had an average lease ratio of 92 per cent.
GLP said it generated US$63 million of development profit in the quarter and met 64 per cent of its full year development profit target of US$200 million.
GLP said its fund management fees for the second quarter rose 25 per cent year on year to US$47 million. This comprised asset and property management fees of US$31 million and development fees of US$16 million, generated from approximately US$26 billion of invested capital. GLP said it has US$12 billion of uncalled capital, which will generate additional fund management fees as it is invested.