SINGAPORE (Feb 4): OCBC is maintaining its “buy” call on Global Logistic Properties on expected 3Q results and healthy operating numbers from China.

In a Thursday report, lead analyst Eli Lee says management has reiterated that 90% of its overall portfolio is driven by domestic consumption in its key markets, which remains stable even in times of slower economic growth.

In 3Q, GLP reported PATMI increased 63.8% to US$184.2 million ($261.1 million) mostly due to higher contributions from JVs and associates. Revenues increased 11.1% to US$198.9 million mainly due to completion and stabilisation of development projects in China with increasing rents.

As at end 3Q, the group’s lease ratio in China was stable at 88% while same property NOI growth and effective rent growth on renewal leases increased 7.1% and 2.5% from a year ago respectively.

Same-property net operating income also increased 2.2% in Japan, 7.2% in Brazil and 8.1% in the US over the quarter.

“Our fair value estimate dips to $2.68, versus $3.07 previously, as we incorporate higher discount rates into our valuation model to reflect weaker macro-economic outlooks in GLP’s key markets and increased operating risks while the group executes its strategy in more uncertain conditions ahead,” says Lee.

As at 11.30am, GLP is up 2.47% at $1.66.