This article is from the Australian Property Journal archive
ASX-listed Propertylink is finishing up on a low. The group which will be taken over by ESR, posted first half year earnings of $27.28 million, a 18% fall.
Revenue in the six months to December 31 declined 31.1% from $101.52 million to $69.97 million, EPS fell 17.9% to 4.53 cents and the group declared an interim dividend of 3.6 cents, unchanged from last year.
Although the HY19 fell by $6 million to $27.28 million, Propertylink said the previous year oincluded performance fees of $22.3 million ($14.5 million after staff incentives and tax) derived from outstanding returns on external funds wound up during the period. No performance fees were earned during HY19.
Net property income increased by $2.8 million over the prior comparative period, partly driven by the $48 million acquisition of the Lane Cove business park in December 2017 and solid like for like rental growth of 3.6%.
Propertylink’s CEO Stuart Dawes said the industrial portfolio is strategically positioned to urban east-coast infill locations where “we are seeing benefits from the growth in e-commerce and urbanisation provide tangible value to our securityholders, further enhanced by our active asset management approach,”
Chief investment officer Peter McDonald said that the strategic positioning of the wholly owned industrial portfolio was benefiting from strong market fundamentals, particularly surrounding e-commerce and urbanisation.
“Underpinning the tailwinds we are seeing in the industrial property market, is Propertylink’s strong active approach to asset management, delivered by an exceptional in-house property team.
“There continues to be good opportunity within the portfolio to deliver value, enhanced by our strong weighting to the infill areas of Sydney and Melbourne,” he added.
During the six-month period, Propertylink transacted on 25 leases across 32,361 sqm or 7% of the portfolio, including 12 renewals at a tenant retention rate of 72.5% and average incentives of 8.8% and 13 new leases at an average incentive of 12.6% with average downtime of 3.3 months. Occupancy remained at 97.8% with over half of vacancy located within the Sydney market and the portfolio achieved like for like rental growth of 3.6%.
Key deals included:
- Seven leasing deals across 8,685 sqm at 7-15 Gundah Road, Mount Kuring-Gai
- A new three-year lease to Intercentral Logistics for 7,605 sqm at 50-52 Airds Road, Minto
- The leasing of 4,769 sqm at 57-101 Balham Road, Archerfield including two 10-year leases to Kennards Hire over 2,625 sqm
- Renewal of a 3,559 sqm lease to ClickOn Furniture at 18-24 Ricketts Road, Mount Waverley for a two-year period
- Leasing of 2,578 sqm or 26% of NLA at 18-20 Orion Road, Lane Cove across six transactions
- Leasing of 2,394 sqm at 15 Talavera Road, Macquarie Park to Allied Credit and Alcon Laboratories for a period of four and five years respectively
- The portfolio weighted average capitalisation rate (WACR) tightened by 25 basis points over the period, to 6.41%.
Propertylink maintains distributable earnings guidance for FY19 of 8.2 to 8.3 cents and distributions of 7.3 cents.
Although ESR’s takeover of Propertylink been declared unconditional and at 27 February 2019, ESR had a relevant interest of 87.33%. The Propertylink board has accepted the offer for securities they hold or control and unanimously backed the deal, where they will receive $1.164 per security on or before 20 March 2019.
Australian Property Journal
