GLP’s 4QFY15 PATMI decreased 34.5% YoY to US$104.9m, mostly due to increased minority interests’ share of profits following the completion of a consortium’s investment in 33.8% of GLP China, lower EBIT and higher While GLP delivered an impressive set of operational KPIs in terms of leasing and development growth over the latest quarter, we judge 4QFY15 PATMI to be slightly below expectations as the group’s share of results from its Brazil JVs came in weaker than expected. In China, 1.2m sqm was leased in 4QFY15 which increased its lease ratio by 170 bps to 91% and we also saw development starts of US$281m (up 35% YoY) with highest ever completions of US$516m (up 13% YoY). We also saw strong leasing momentum in Japan in 4QFY15 with 88k sqm new leases signed (up 71% YoY) and a 1% increase in average portfolio rent. In Brazil, the group signed 108k sqm of new leases in 4QFY15 with a 6.7% positive rental reversion in FY15. GLP proposed a final dividend of S$0.055, which is up 22% YoY and above expectations. Maintain BUY with an unchanged fair value estimate of S$2.99.
4QFY15 profits a slight miss
GLP’s 4QFY15 PATMI decreased 34.5% YoY to US$104.9m, mostly due to increased minority interests’ share of profits following the completion of a consortium’s investment in 33.8% of GLP China, lower EBIT and higher income tax expenses over the quarter, partially offset by higher fair value gains for investment properties. 4QFY15 revenues, however, increased 6.2% YoY to US$166.8m given the completion and stabilization of developments in China, higher rents and the inclusion of a month’s management fee from GLP US Income Partners I, partially offset by the sale of 11 properties in Japan to GLP J-REIT last year and the FX losses from JPY depreciation. While GLP delivered an impressive set of operational KPIs in terms of leasing and development growth over the latest quarter, we judge 4QFY15 PATMI to be slightly below expectations as the group’s share of results from its Brazil JVs came in weaker than expected. GLP proposed a final dividend of S$0.055, which is up 22% YoY and above expectations.
Delivering solid operational KPIs in key markets
Over the latest quarter, the group delivered a solid set of KPIs in its key markets. In China, 1.2m sqm was leased in 4QFY15 which increased its lease ratio by 170 bps to 91% and we also saw development starts of US$281m (up 35% YoY) with highest ever completions of US$516m (up 13% YoY). Management also reported positive 5.5% rental reversions in China in FY15 and that 61% of its new leases are with existing customers, which points to significant “network effect” synergies from its relationship with a large network of clients. We also saw strong leasing momentum in Japan in 4QFY15 with 88k sqm new leases signed (up 71% YoY) and a 1% increase in average portfolio rent. In Brazil, the group signed 108k sqm of new leases in 4QFY15 with a 6.7% positive rental reversion in FY15. The stabilized lease ratio in the Brazilian portfolio remains high at 97%. Maintain BUY with an unchanged fair value estimate of S$2.99.
GLP’s 4QFY15 PATMI decreased 34.5% YoY to US$104.9m, mostly due to increased minority interests’ share of profits following the completion of a consortium’s investment in 33.8% of GLP China, lower EBIT and higher income tax expenses over the quarter, partially offset by higher fair value gains for investment properties. 4QFY15 revenues, however, increased 6.2% YoY to US$166.8m given the completion and stabilization of developments in China, higher rents and the inclusion of a month’s management fee from GLP US Income Partners I, partially offset by the sale of 11 properties in Japan to GLP J-REIT last year and the FX losses from JPY depreciation. While GLP delivered an impressive set of operational KPIs in terms of leasing and development growth over the latest quarter, we judge 4QFY15 PATMI to be slightly below expectations as the group’s share of results from its Brazil JVs came in weaker than expected. GLP proposed a final dividend of S$0.055, which is up 22% YoY and above expectations.
Delivering solid operational KPIs in key markets
Over the latest quarter, the group delivered a solid set of KPIs in its key markets. In China, 1.2m sqm was leased in 4QFY15 which increased its lease ratio by 170 bps to 91% and we also saw development starts of US$281m (up 35% YoY) with highest ever completions of US$516m (up 13% YoY). Management also reported positive 5.5% rental reversions in China in FY15 and that 61% of its new leases are with existing customers, which points to significant “network effect” synergies from its relationship with a large network of clients. We also saw strong leasing momentum in Japan in 4QFY15 with 88k sqm new leases signed (up 71% YoY) and a 1% increase in average portfolio rent. In Brazil, the group signed 108k sqm of new leases in 4QFY15 with a 6.7% positive rental reversion in FY15. The stabilized lease ratio in the Brazilian portfolio remains high at 97%. Maintain BUY with an unchanged fair value estimate of S$2.99.
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