GLP’s 3QFY17 PATMI fell 7% YoY to US$171m mainly due to the absence of a one-time syndication gain related to GLP’s first US portfolio in 3QFY16 and foreign exchange losses in 3QFY17. That said, adjusted for non-recurring items, the group’s core earnings and sameproperty net operating income both rose 22% and 7%, respectively, as GLP’s scale of operations and fund management platform continues to grow. We deem these results to be mostly within expectations.

Management reported that new and renewal leases increased 42% YoY to 36m sq ft while its global lease ratio remained at a high 92%. Rent growth on renewal leases and customer retention are also tracking at a healthy 92% and 73% respectively.

Regarding the ongoing independent strategic review, GLP reported that it has received various non-binding proposals which will be evaluated by a special committee and has highlighted that there is no assurance any transaction will materialize from the review.

We will have an analyst briefing with management this morning and, in the meantime, put our rating and fair value estimate UNDER REVIEW.

Source: OCBC Research - 9 Feb 2017