Propertylink Group (ASX: PLG) held its 2018 Annual General Meeting on Friday, 30 November 2018.
Chief Executive Officer of Propertylink Stuart Dawes confirmed Fiscal 2019 guidance to deliver distributable earnings within the range of 7.6-7.7 cents per share and a distribution of 7.3 cents per security.
The guidance is reportedly based upon the tailwinds from strong industrial portfolio with greater exposure in Sydney and Melbourne markets. The management advised that company’s portfolio includes significant opportunities to deliver value through its active approach to leasing, asset repositioning and selective development.
During the FY19’s first quarter ended 30 September 2018, the company has delivered a net increase of $30.9 million in the value of properties, reflecting 3.9% increase of book value. This has further resulted into an improvement of 5 cents per share to NTA.
Mr. Dawes stated that the company has further leased 26,000 sqm or 5.8% of the portfolio, across 17 transactions. He added that overall industrial portfolio is in excellent shape, with low occupancy, stable recurring income and solid prospects for rental growth.
The company has witnessed an average lease term of 4.4 years, average incentives of 11% and average downtime of 2 months on new leases. At 30 September 2018, independent valuations were completed for 29 of the 31 properties in the wholly owned industrial portfolio.
In September the company has established a new $350 million core-plus and value-add industrial fund with China Merchants Capital, the Propertylink Australian Logistics Trust II.
In address to its shareholders at 2018 AGM, CEO stated that the fund will build a portfolio of logistics properties, focused on urban infill locations on the east coast of Australia, in particular Sydney and Melbourne.
At 30 September the Group has managed $1 billion in assets on behalf of its institutional investors. Reflecting company’s strong views on the Sydney market and its positioning to take advantage of that market some years back 60% of the external fund portfolio is located in Sydney. The company expects Sydney’s underlying real estate fundamentals to follow the economic strength of NSW.
“Propertylink’s 60% allocation to office markets on the east coast provides attractive upside opportunities embedded in company’s asset strategies”, stated Mr. Dawes.
In Fiscal 2018 the company has delivered distribution of 9.25 cents per security. It translates distribution earnings of $55.7 million in FY18, an increase of 23% over the previous corresponding period. During this period, Propertylink’s valuations delivered $97 million of growth in its assets under management. This was further enhanced by $53 million in uplifts from the independent valuations carried out across 25 of the 28 fund assets at 30 September 2018, which also increased the carrying value of Propertylink’s co-investment in external funds by $8.6 million.
PLG is currently trading flat. It last traded at $1.180 with PE of 5.730 x and market capitalization of $711.28 million.