Month: April 2007

Suntec – BT

Suntec Reit’s Q2 net up 19.3%

SUNTEC Real Estate Investment Trust (Suntec Reit), which is controlled by Hong Kong tycoon Li Ka-shing, yesterday reported a 19.3 per cent increase in distributable income for its second quarter ended March 31, on the back of higher office rents.

The trust, based on Suntec City and other properties, said that distributable income came to $28 million for the three months ended March, up from $23.5 million for the same period a year ago.

The Reit’s distribution per unit rose 8.5 per cent to 1.97 cents, up from 1.81 cents. Net property income rose 10.3 per cent to $35.2 million, from $32 million for the previous corresponding period.

The Reit attributed the improved performance to higher office revenues from its Suntec City and Park Mall offices. For Suntec City, revenue was driven by both higher occupancy and increased rentals, said the Reit. Revenue from the property was also boosted by strata office space acquisitions.

‘Office rents continued to register double-digit growth rates in the first quarter of 2007 as vacancy in Grade A office space dropped further to 0.4 per cent from 0.8 per cent in the previous quarter,’ Suntec Reit said in a filing to the Singapore Exchange.

Office rents in Singapore are close to a 10-year high as demand continues to grow amidst limited supply. Market watchers expect the rent hikes to continue as supply is expected to remain tight at least until 2010 when several major office complexes are due to be completed.

In the meantime, Suntec Reit plans to continue boosting its portfolio. It said on Jan 30 that it plans to expand its commercial assets in Singapore by about 50 per cent to $3 billion in two to three years to benefit from the economic growth.

Its portfolio of investment properties was valued at $3.87 billion as at March 31, 2007, giving the trust a ‘revaluation surplus’ of $613.6 million. Suntec Reit’s shares fell 2 cents, or one per cent, to close at $2 yesterday. The share price has risen 9.9 per cent this year.

tfwee April 27, 2007 Suntec No Comments »

MapleTree – BT

MapletreeLog beats forecasts

MAPLETREE Logistics Trust (MLT), which owns warehouses and container depots in Singapore and abroad, said yesterday its distributable income for first-quarter 2007 grew 84.2 per cent to $15.3 million, from $8.3 million a year earlier.

The trust’s dividend per unit (DPU) rose 34.5 per cent to 1.48 cents, from 1.10 cents in Q1 2006. Distributable income was 8.5 per cent higher than forecast, while DPU was 7.2 per cent above the forecast. Net property income rose 128 per cent to $25.7 million.

Chua Tiow Chye, chief executive of MLT’s management team, attributed the performance to the 25 new properties acquired in the past year. The new acquisitions took the number of completed assets to 49 with a combined value of more than $1.5 billion.

Thirteen acquisitions are pending completion. Once they are completed, MLT will have 62 properties in its portfolio – 38 in Singapore, nine in Malaysia, six in Japan, six in Hong Kong and three in China.

Mr Chua said the trust is also exploring new markets such as Vietnam, India and South Korea. MLT hopes to have assets in Vietnam and South Korea by the end of this year. In India it has no assets lined up for acquisition and will work with its sponsor Mapletree Investments to build properties the trust can later acquire.

Right now, Singapore and Hong Kong together account for about 94 per cent of the trust’s gross revenue, with Japan, China and Malaysia making up the balance. Going forward, MLT expects more income contributions to come from Japan, China and Malaysia.

Mr Chua said the trust is confident of delivering its 5.69 cents DPU forecast this year on the back of a strong first quarter performance. MLT closed unchanged at $1.33 yesterday.

tfwee April 27, 2007 MLT No Comments »

Cambridge – BT

Cambridge Reit’s net 8.8% above forecast

CAMBRIDGE Industrial Trust (CIT), a real estate investment trust, yesterday said that its distributable income in the quarter to March 31 came to $7.4 million, exceeding forecast by 8.8 per cent. This means 1.434 cents per unit is available to unitholders.

Trust manager CIT Management Ltd said the total income of $7.4 million represents an annualised yield of 7.09 per cent, based on the closing price of 82 cents per unit on March 30.

CIT’s gross revenue came to about $11 million, with net property income of $9.4 million. The trust said the higher gross revenue for the quarter was due to rental revenue from two properties acquired during the quarter – 63 Hillview Avenue and 55 Ubi Avenue. Independent valuers priced the two at $91 million.

Net property income was 5 per cent higher than forecast, due to higher revenue and lower actual property expenses of $1.6 million, due mainly to lower land rent, property tax and non-routine expenses.

CIT said it expects to deliver the projected yield and is on track to increase its portfolio through further acquisition of properties.

The management company’s chief executive, Wilson Ang, said: ‘Besides completing the acquisition of two new properties this quarter, we have also announced four option agreements worth $58.3 million which, upon completion, will contribute an additional annual gross revenue of $5.71 million.

‘Together with signed MOUs worth $115 million as at March 31, 2007, we are targeting to acquire approximately $500 million worth of properties this year.’

tfwee April 27, 2007 ESR No Comments »

MLT – DBS

Acquisition pipeline remains strong

Comment on Results

MLT reported 1Q07 results in line with our expectations. Gross revenue grew 116% yo- y to S$28.8m, due mainly to additional income contributed from new properties acquired. Net distributable income increased by 84% y-o-y to S$15.3m. DPU rose by 35% y-o-y to 1.48 cents and moving forward, a better DPU is expected to achieve in 2Q07.

Outlook

The sponsor, Mapletree Investments Pte Ltd, has a development pipeline in Vietnam, China and Malaysia, with total estimated value of S$315.0m. First on MLT s acquisition list is the multi-tenanted logistics and warehousing facility in Vietnam. Construction was completed in Jan 07 and once it is fully leased, MLT is expected to acquire this property. In the medium to long term, MLT would be exploring the India, Thailand and Taiwan markets. However, around 75% of the portfolio would still comprise assets from Singapore, Hong Kong and Japan.

Recommendation
As at 31 Mar 07, the group has announced 13 acquisitions (approximately S$467.0m) which were pending completion. With a target balance of around S$400-500.0m, MLT is on track to achieve the acquisition target of S$1.0bn in 2007. Based on DCF valuation, we have a target price of S$1.46 (assumed acquisitions of S$1bn p.a. from 2007 to 2009). Maintain Buy.

tfwee April 27, 2007 MLT No Comments »

Suntec – DMG

Office segment continues to shine

Suntec Reit S 2Q07 distributable income grew 19% yoy and 3.7% qoq to $28m. The results were boosted by healthy organic growth within its flagship assets, contributions from additional Suntec office space and better cost management. Looking ahead, the group should continue to leverage into the rising office leasing market with a sizeable 80% of its office NLA scheduled to be renewed over FY07-09. In addition to a sizeable retail renewal profile, value-add activities at Suntec retail mall should underpin bottomline growth. Maintain Buy with a revised price target of $2.20. This translates to a potential absolute return of 14% over the next 12 months.

Another record quarter. Suntec Reit reported 2Q07 distributable income of $28m, up 19.3% yoy, bringing 1H07 distribution income to $55.1m, an increase of 20.5% over previous period. However, 2Q07 and 1H07 DPU rose a more modest 8.5% and 9.5% to 1.97cts and 3.86cts respectively due to a 9% enlargement in issued units. There was a $613.6m revaluation surplus which lifted book NAV to $1.83.

Strong organic growth. Office revenue accounted for 37% of topline in Q2. This stream of income notched a 23% yoy rise to $17.1m aided by increased occupancy of 99.2% and new contributions from the 30172sf strata title space acquired at Suntec City and higher contracted rental rates. Transacted rents continued to climb to $8.50-9psf/mth compared to the average outgoing levels of $4.60-4.80psf.

Robust lease reversion schedule. Outlook remains positive with 33% and 40% of office NLA to be renewed in FY08 and FY09. This should enable Suntec to leverage into the robust office leasing market. Plans to buy more office strata space at Suntec should deepen the group s exposure to the rising office sector.

Retail income to benefit from AEI. Apart from the renewal of 54% of retail NLA over the next 2-3 years, retail revenue should be lifted by the asset enhancement initiatives such as establishment of a youth and fashion zones at Suntec Mall. An estimated 60-72% of these areas have been pre-committed.

Maintain Buy with revised price target of $2.20. Suntec is currently trading at FY07 and FY08 yields of 4.1% and 4.6%. While Suntec does not have a visible pipeline, near term growth would be underpinned by strong performance of the office leasing market.