Global Net Lease(US:GNL)2022-08-04 20:00Financial Data and Key Metrics Changes - In Q2 2022, AFFO grew by 5% year-over-year and 1.6% quarter-over-quarter to $45 million, with AFFO per share of $0.43 [11][21] - Revenue for Q2 2022 was recorded at $95.2 million, with a net loss attributable to common stockholders of $5.8 million [21] - The company distributed $41.6 million in dividends to common shareholders in the quarter, equating to $0.40 per share [24] Business Line Data and Key Metrics Changes - The portfolio consists of 55% industrial and distribution assets, 42% office, and 3% retail, compared to 52%, 43%, and 5% respectively at the end of Q2 2021 [16] - Year-to-date, the company completed eight lease renewals and two tenant expansion projects totaling 2.6 million square feet, generating $102 million of net new straight-line rent [13] Market Data and Key Metrics Changes - Geographically, 62% of annualized straight-line rent revenue comes from properties in the U.S. and Canada, while 38% comes from the UK and Western Europe [15] - The weighted average remaining lease term for the portfolio is 8.3 years, with 74% of leases not expiring until 2027 or later [14][15] Company Strategy and Development Direction - The company is focused on increasing portfolio concentration in industrial and distribution assets, with a strategy to acquire single-tenant properties in North America and Europe [7][19] - The company aims to continue growing its portfolio by focusing on dependable industrial and distribution asset classes [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the acquisition outlook, noting improved cap rates and annual rent increases due to the current market dynamics [33][34] - The company is well-positioned for future growth, supported by a strong balance sheet and a comprehensive hedging program that mitigates currency fluctuations [12][20] Other Important Information - The company completed a recast of its corporate credit facility with a new $1.45 billion revolving credit facility, improving pricing by 15 basis points [10] - As of June 30, 2022, the company had net debt of $2.3 billion at a weighted average interest rate of 3.5% [22] Q&A Session Summary Question: Can you elaborate on the hedging component of the European assets? - The positive hedging impact of $1.5 million was realized on FX forwards that settled during the quarter, positively impacting AFFO [30][31] Question: How is the acquisition outlook changing in the current market? - The company is seeing better cap rates and annual rent increases, making acquisitions more accretive, and is optimistic about the deal flow [32][34] Question: What is the status of property dispositions? - The total dispositions for the year are expected to exceed $50 million, including one property sold in the UK and two additional properties under agreement [36] Question: Are there differences in bid-ask dynamics between U.S. and European assets? - The U.S. market is seeing rising cap rates, while the European market remains stable, with the company prepared to take advantage of potential distressed sellers [40][41] Question: How are currency and interest rate volatility impacting acquisition capabilities? - Currency and interest rate volatility have not negatively impacted acquisition capabilities, and the company continues to find attractive deals in Europe [42] Question: What is the plan for upcoming debt maturities? - The company has about $40 million maturing this year and is evaluating options for refinancing, particularly for the UK bulk loan [52][56]