Propertylink books $15m revaluation boost

Tuesday 28 February 2017

 

Source: The Australian Financial Review 

 

Propertylink, Industrial asset manager & landlord benefited from a near $15 million boost to valuations in the 6 months to December, reflecting strong demand for warehousing & logistics properties.

Reporting its first-half results since listing on ASX in August, the Sydney-based company declared an interim distribution of 2.7¢ per security.

Its after-tax profit of $68.2million was not directly comparable with the $1.6 million of a year earlier of the former Propertylink unlisted stapled group. It also reflects the $16.8 million cost of last year's listing.

Over the period, Propertylink benefited from an increase in fair value of investment properties of $8.32 million & revaluation gains on property, plant & equipment – reflecting the value uplift of the Melbourne markets –of $6.66 million. 

Chief executive Stuart Dawes said that while the market was lifting other valuations as well, Propertylink was benefiting from actively managing leases and improving the value of its properties.  

"We'd like to think the value increase we're seeing is actually come through from active work," Mr Dawes told The Australian Financial Review. 

Over the 6-month period, Propertylink completed 35 leasing transactions, covering 128,418m² & accounting for 25.5% of its portfolio. The weighted average lease expiry (WALE) of the overall portfolio stands at 4.4 years, up from 3.6 years at time of the IPO.

The company made 14 renewals at a tenant retention rate of 81% & average incentive of 4.3%. It struck 21 new leases at average incentive of 19% & there was an average downtime of 3.6 months on these new leases.

Mr Dawes said he could not comment on a recent Financial Review report that it was in due diligence to buy the State Law Building in Brisbane, colloquially referred to as "Gotham City", for about $150 million.

The company said it remained on target to deliver its 2017 forecasts of distributable earnings per security of 6.67¢ and distribution per security of 6.32¢.

Propertylink shares were trading up almost 1%, at 81.25¢ on Tuesday. They fell as low as 67.5¢ in October, but haven't yet recovered to the 89¢ price they listed at.

Mr Dawes said Propertylink had divested non-core assets worth $46.2 million at a premium to book value that it had recycled into the group since listing.

"I think over the course of the next 12 or so months, it would be reasonable to assume that we'll realise about the same amount," he said. 

In December Propertylink paid $46.6 million for a new warehouse in Western Sydney, recently leased to online fashion retailer The Iconic.

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