Earnings Results under Review: Brookfield Property Partners L.P. (NASDAQ: BPY)


On Tuesday, Brookfield Property Partners L.P. (NASDAQ: BPY) shares recorded a trading volume 1,648,175 shares as compared to its average volume of 3,441,821 shares. The shares price traded between $19.79 and $20.18 during the last trading session above/below with +1.57% at $20.09. The company has 371.8M shares outstanding and market value of 16.26B. Over the one year trading period, the stock has a peak price of $24.50 and its down is recorded at $18.13.

Brookfield Property Partners L.P. (NASDAQ: BPY; TSX: BPY.UN) recently reported financial results for the quarter ended June 30, 2018.

“Strong operating performance across our businesses contributed to year-over-year Company FFO per unit growth of 13% on a comparable basis,” stated Brian Kingston, chief executive officer.  “We look forward to completing the acquisition of GGP following the affirmative shareholder vote on July 26. We are thrilled with the prospects to fully integrate GGP’s premier U.S. retail business into Brookfield’s global, best-in-class diversified property portfolio, creating important value for both current and new BPY unit holders.”

Net income for the quarter ended June 30, 2018 was $1.1 B versus $664M for the same period in 2017.  Net income per LP unit for the current quarter was $0.69 contrast with $0.31 in the previous year. The raise is primarily attributable to the extinguishment of debt associated with the sale of a hospitality asset and a higher level of gains reflective of strong operating results.

On a comparable basis, Company FFO was $246M ($0.35 per unit) for the quarter ended June 30, 2018, contrast with $218M ($0.31 per unit) for the same period in 2017. The comparative period excludes a one-time $40M non-recurring legal settlement earned last year. Growth was driven by improved same-property performance and growth in the overall operations. Company FFO including the non-recurring legal settlement was $258M ($0.37 per unit) for the same period in 2017.

Operating Highlights

Our Core Office operations generated Company FFO of $149M for the quarter ended June 30, 2018 contrast to $122M on a comparable basis in the same period in 2017. Our Core Office portfolio generated 6.6% same-property growth, largely driven by leasing activity in Downtown New York, London and Toronto.

Occupancy in our Core Office portfolio finished the quarter at 92.7% on 1.4M square feet of total leasing, contrast with 92.6% in the previous quarter and 91.9% in the prior-year period.  New leases were signed at average rents about 10% higher than leases that expired during the quarter.

Our Core Retail operations generated Company FFO of $119M for the quarter ended June 30, 2018, consistent with the comparable period performance in 2017.

Same-property Core Retail occupancy finished the second quarter of 2018 at 94.2%, a decrease of 0.4% over the prior-year period, with average suite-to-suite rent spreads of 20% for leases commencing in the trailing 12 months. On a trailing 12-month basis, NOI-weighted tenant sales per square foot were $739, an raise of 4.2% over the previous year.

New Investments

The proceeds raised from asset sales were used to invest in our active development pipeline and to fund new acquisitions, including:

  • Land for two additional sites at our residential development in Greenpoint, Brooklyn, for $144M.
  • Two office buildings in Northern Virginia for $95M.
  • Interests in three industrial properties in New Jersey for $250M ($75M at BPY’s share).
  • The Hilton Fort Lauderdale Hotel & Marina for $177M ($45M at BPY’s share).
  • A 79% interest in IC Campus, a student housing company in Europe, for $148M ($37M at BPY’s share).
  • 660,000 square feet of office space on seven floors above Macy’s State Street department store in Chicago for $27M ($7M at BPY’s share).

 (BPY) has price-to-cash ratio of 3.28 and price to sale ratio of 0.82. The company net profit margin is 9.10% and gross profit margin is 63.70%. Brookfield Property Partners is one of the world’s premier commercial real estate companies, with about $69B in total assets.