Month: April 2009
CCT – CIMB
Still holding strong
• Broadly in line, occupancy stable. 1Q09 results are broadly in line with consensus and our expectations. DPU of 3.24cts forms 29% of our forecast for FY09, up 19.6% qoq due mainly to better net property income margins and trust expenses (down from one-off expense in 4Q08 for abortive cost for Market Street Carpark development). Net property income of S$69.9m was up 6.5% qoq as property-related expenses (excluding property tax and property management fees) declined 20%. Portfolio occupancy at 96.7% was up marginally from 96.2% in 4Q08, and remained materially higher than the islandwide average of 90%.
• Lease renewals on track. About 44.2% of office leases and 32.8% of retail leases expiring in FY09 have been renewed to date. Reversions were positive at 49% above preceding rates, typically signed three years earlier. Rents signed for CCT’s Grade A office buildings remain in the double-digit range amid market news that rents for some Grade A office buildings have fallen to single digits. Major tenants include Legg Mason (One George Street), CapitaLand (Wilkie Edge), BNI (Robinson Point) and foodcourt operator Koufu (Market Street Carpark). With good progress in lease renewals, committed occupancy at the end of April improved 1% pt over 1Q09 to 97.7%.
• Refinancing for debt expiring in 2009 secured. Management says it has obtained a letter of commitment for S$160m from a bank .This will be a 3-year-term loan secured on HSBC Building to be drawn down when its existing facility expires in mid-year. From the announced margin of 3% p.a. (inclusive of fees), we estimate an all-in cost of about 4.7%. This is still within our cost-of-debt estimate of 5%. With this, CCT has secured all refinancing of debt due in 2009.
• Maintain Outperform, earnings forecasts and target price of S$1.12. Management’s ability to improve occupancy in an environment of falling rents and rising vacancy is reassuring. We believe CCT’s distribution in FY09 will stay relatively stable, anchored by its top 10 tenants with a long weighted average lease term to expiry of 6.4 years. These top 10 tenants also contribute 50% to CCT’s monthly gross rental income. Maintain Outperform and DDM-based target price of S$1.12 (discount 10.4%).
CCT – BT
CAPITACOMMERCIAL Trust (CCT) on Thursday said that Q1 distributable income rose 27 per cent to $45.4 million – from $35.9 million a year earlier – as it saw contributions from recently-acquired properties One George Street and Wilkie Edge.
FCOT – BT
SINGAPORE – Singapore’s Frasers Commercial Trust said on Thursday it may consider a rights issue as an option to refinance its debt, however the company said no firm decision has been taken on the plan.
a-iTrust – BT
a-iTrust posts 25% rise in Q4 DPU
ASCENDAS India Trust (a-iTrust) said yesterday that distributable income for its fourth quarter ended March 31 rose 26 per cent to $15.6 million from a year back.
Distribution per unit (DPU) for the quarter rose 25 per cent to 2.05 cents, bringing the full year’s DPU to 7.54 cents.
The 24 per cent rise in full-year DPU was ‘driven by strong performance of the assets’ and exceeded the DPU forecast of 6.85 cents stated in its 2007 listing prospectus. Distribution is semi-annual, so the DPU for Q3 and Q4, which amounts to 4.07 cents, will be payable on May 26.
Total property income for the fourth quarter rose 13 per cent to $30.8 million from the year-ago Q4, while net property income grew 8 per cent to $17.4 million. For the full year, total property income grew 15 per cent to $118.1 million, from $102.7 million in the previous year, while net property income rose 9 per cent to $66.2 million.
Net asset value attributable to unitholders was 89 cents per unit as at March 31.
Jonathan Yap, chief executive of the trust’s manager, said: ‘Our results reflect the strong cash generation of our assets and robust demand for space in our properties.’
a-iTrust has a portfolio of 4.8 million square feet of completed space in Bangalore, Chennai and Hyderabad. The occupancy rate for its portfolio was 98 per cent at the close of the fourth quarter, above market occupancy rates of 72 per cent to 87 per cent in the three cities, the trust said.
During the year, leases for 24 per cent of the portfolio’s space expired, out of which 89 per cent was renewed. The trust manager said that it intends to ‘renew or replace expiring leases in advance’. About 13 per cent of space is due for renewal in the next year.
‘Apart from organic growth, we are developing buildings on land owned by the trust, to give us new income stream,’ said Mr Yap.
These include plans to develop 1.5 million square feet of space in international tech parks in Bangalore and Chennai. The trust also owns 2.7 million sq ft of space which is largely within an approved special economic zone in the Bangalore tech park, which can potentially be further developed.
As at March 31, a-iTrust’s total borrowings of $79 million reflected a gearing level of 9 per cent.
The trust’s shares closed 0.5 cent down at 50.5 cents yesterday.
Suntec – BT
Suntec Reit secures $825m refinancing
Interest margin at below 3.75%; Q1 distributable income up 23% at $46.4m
SUNTEC Reit has secured an $825 million loan facility. And with this fresh loan, the office and retail trust has no further refinancing needs until 2011.
The new facility will be used to refinance Suntec Reit’s existing debt under its medium-term notes programme and $700 million of commercial mortgage backed securities maturing this year.
It comprises a $725 million three-year loan and a $100 million seven-year fixed-rate loan from a panel of seven banks. The blended all-in interest margin works out to less than 3.75 per cent, Suntec Reit said yesterday.
The loan facility will be secured by Suntec City Mall and parts of the trust’s portfolio in Suntec City Office Towers. The loans were granted by the three local banks – DBS Bank, OCBC Bank and United Overseas Bank – and four foreign banks.
The new facility means that Suntec Reit has refinanced $1.7 billion of borrowings in the past two years, said Yeo See Kiat, chief executive of the trust’s manager. Suntec Reit refinanced $870 million of loans in 2008.
‘Amid the tight liquidity in this global economic and financial crisis, this club loan of $825 million clearly demonstrates Suntec Reit’s strong credit standing,’ said Mr Yeo, adding that the trust is now in a good position to meet the challenges ahead.
Yesterday, Suntec Reit also reported that distributable income for Q1 2009 rose 23 per cent to $46.4 million, from $37.6 million a year ago, on higher office and retail rents from its properties.
On the back of this, distribution per unit (DPU) rose 15.9 per cent to 2.918 cents from 2.5185 cents in 2008.
Net property income for the quarter rose 15 per cent to $49.2 million, from $42.6 million a year ago.
Gross office revenue for the three months ended March 31 rose 32 per cent to $30.2 million. At end-March, committed overall occupancy for the office portfolio stood at 97.4 per cent, with renewal and replacement leases at Suntec City secured at an average of close to $10 per square foot per month (psf pm) for the quarter.
Likewise, committed retail passing rents remained strong. The committed retail passing rent at Suntec City Mall stood at $11.05 psf pm, while rents at Park Mall and Chijmes were $7.63 psf pm and $10.76 psf pm. The committed overall occupancy for the retail portfolio was 98.8 per cent.
Suntec Reit owns Suntec City Mall and office units in Suntec Towers One, Two and Three and the whole of Suntec Towers Four and Five. Its property portfolio also comprises Park Mall, Chijmes and a one-third interest in One Raffles Quay.
The trust’s units lost three cents, or 4.3 per cent, to close at 66 cents yesterday.