GLP 1QFY14 Earnings Up 33%

GLP reported a 33% increase in earnings for the three months ended 30 June 2013 (“1QFY14”). GLP continues to benefit from solid development momentum and rent growth across its portfolio.

• China revenue up 40%, driven by developments and rent growth; same-store net operating income up 10.4%

• Group development starts of 799,000 sqm (8.6 million sq ft) GFA, up 25%

   

 

Singapore, 14 August 2013 – Global Logistic Properties Limited (“GLP”), the leading provider of modern logistics facilities in China, Japan and Brazil, reported a 33% increase in earnings (PATMI) for the three months ended 30 June 2013 (“1QFY14”). GLP continues to benefit from solid development momentum and rent growth across its portfolio.

1QFY14 Group revenue was US$137 million. This was 20% lower than the same period last year (“1QFY13”), mainly due to the contribution of 33 Japan properties to GLP J-REIT. Revenue in China was up 40%, driven by developments and continued rent growth. In Japan, revenue was 51% lower, mainly due to the contribution of properties to GLP J-REIT, depreciation of the Japanese Yen (“JPY”) and lease cancellation income received from a tenant in 1QFY13. Adjusting for these three items, Japan revenue was up 1%.

Fund management revenue in 1QFY14 was US$12 million, up 122% from a year earlier. This comprised asset and property management fees of US$8 million and property development fees of US$4 million. GLP expects fund fees to continue increasing in tandem with the strategic growth of the fund management platform.

1QFY14 Group EBIT and earnings rose 34% and 33% respectively, driven by higher revenue in China and revaluation gains of US$159 million. Revaluation gains were mainly attributable to higher property values in Japan, as well as developments and rent growth in China.

Mr. Jeffrey H. Schwartz, Co-Founder of GLP and Chairman of the Executive Committee,
said: “China, Japan and Brazil have the world’s most attractive supply and demand dynamics for logistics in the medium and long-term. They are markets where we are confident of building a sustainable, long-term business and generating solid returns for our shareholders. While we remain mindful of the potential near-term challenges in the local and global economic environments, we are confident that our unrivalled market positions, exemplary team and strong balance sheet position us well for continued growth.”

Continued Development Focus
GLP’s China portfolio encompasses a gross floor area (“GFA”) of 15.6 million square meters (“sqm”) (168 million square feet (“sq ft”)), up 36% year-on-year. The stabilized lease ratio in China was 88% as of quarter-end and has increased to 90% as of today. The lease ratio in the domestic consumption-focused portfolio is 95% as of today. Same-store net operating income was up 10.4% year-on-year. Growth in developments led to a 30% year-on-year growth in NAV to US$4.8 billion.

GLP continued its strategy of growing its land bank in China, with 576,000 sqm (6.2 million sq ft) of GFA acquired in 1QFY14. GLP’s land reserve now stands at 11.9 million sqm (128 million sq ft), up 31% from last year, providing a significant pipeline for future developments.

GLP commenced 733,000 sqm (7.9 million sq ft) of new developments in China in 1QFY14, 56% more than the same period last year. This represents 29% of the company’s target of 2.5 million sqm (26.9 million sq ft) of new developments for FY2014.

In Japan, the lease ratio remains high at 99%, with a strong tenant retention rate of 81%. GLP completed Misato III, a 95,000 sqm (1 million sq ft) facility in Greater Tokyo, during the first quarter. Demand for the facility is strong, with the lease ratio currently at 65%, ahead of underwriting.

New and expansion leases in Japan stood at 145,000 sqm (1.6 million sq ft) in 1QFY14. Demand for GLP’s strategically located modern facilities remains particularly strong from the 3PL industry, as companies continue to seek ways to modernize their supply chains. Approximately 48,000 sqm (517,000 sq ft) was leased to a number of 3PL providers at GLP Misato III in Greater Tokyo, all catering to domestic consumption, and 13,000 sqm (140,000 sq ft) was leased in Fukuoka to CL Co., Ltd, a growing 3PL company.

In Brazil, GLP commenced developments totalling 54,000 sqm (581,000 sq ft) at GLP Campinas and GLP Gravataí. The company also completed its second building at GLP Guarulhos in São Paulo, comprising 9,400 sqm (101,000 sq ft) of GFA. GLP Guarulhos will be Brazil’s best master-planned logistics park, comprising 17 buildings, when it is completed.

The lease ratio in Brazil remains high at 98%. The stabilized properties in GLP Brazil Income Partners I are 100% leased, with a long weighted average lease expiry period of eight years.

Mr. Ming Z. Mei, Co-Founder and Chief Executive Officer of GLP, said: “We are pleased with the strong momentum we have seen across the business in the first quarter, particularly in our development activities.

“80% of our China portfolio is geared towards domestic demand at a time when the country is undergoing a significant transition to a consumption-based economy. Japan has seen a tangible uptick in confidence and we are already seeing this feeding through to our business. Brazil’s emerging middle class and vast natural resources make it a market with compelling long-term fundamentals. Moreover, all three markets lack an adequate supply of modern logistics facilities. Looking ahead, we remain confident, both in the long-term fundamentals in our markets and in our ability to drive continued value for all our stakeholders.”
 

Fund Management Platform
GLP’s strong fund management platform leverages GLP’s asset management expertise and strong relationships with global institutions. As at 30 June 2013, total assets under management stood at US$8.1 billion, compared to US$2.7 billion last year. Of this, US$5.8 billion has been invested, in both Japan and Brazil, with a further US$2.3 billion of committed capital.

To-date, the US$2.2 billion GLP Japan Development Venture, a 50/50 joint venture between GLP and the Canada Pension Plan Investment Board, has announced five development projects for a total investment of US$603 million.

Strong Balance Sheet
GLP’s balance sheet remains strong, with net debt of US$1.1 billion, net debt to assets of 9.2% and look through leverage of 12.5%. As of 30 June 2013, GLP’s weighted average debt maturity was 4.9 years, up from 2.6 years a year ago. 70% of GLP’s debt matures in FY2017 and beyond and fixed rate borrowings constituted 73% of GLP’s total borrowings.

Earnings Call/Webcast Information
A briefing for investors and analysts is scheduled on Wednesday 14th August 2013 at 6pm Singapore time. Please dial +65 6723 9381 to join the briefing (passcode: 15297307) or visit our website (ir.glprop.com) to access our webcast for the event. A replay of the briefing will also be available on our website.

 

About Global Logistic Properties (www.glprop.com)
Global Logistic Properties Limited (“GLP”) is the leading provider of modern logistics facilities in China, Japan and Brazil. Our property portfolio of 21.4 million square meters (230 million square feet) is strategically located across 66 cities, forming an efficient logistics network serving 700 customers. We are dedicated to improving supply chain infrastructure for the world’s most dynamic manufacturers, retailers and third party logistics companies. Domestic consumption is a key driver of demand for GLP.

The Group is listed on the Mainboard of Singapore Exchange Securities Trading Limited (SGX stock code: MC0.SI; Reuters ticker: GLPL.SI; Bloomberg ticker: GLP SP).

 

GLP Investor Relations & Media Contact:
Ambika Goel, CFA
SVP- Capital Markets and Investor Relations   
Tel: +65 6643 6372
Email: agoel@glprop.com

 

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