KREIT – BT

K-Reit Asia’s Q2 net profit soars 70% to $4.16m

Distribution per unit for the quarter rises 20.9% to 2.14 cents

HELPED by higher rental income, K-Reit Asia’s net profit for the second quarter ended June 30 soared 70.4 per cent to $4.16 million from a proforma $2.44 million in the year-ago period.

This brought the first half’s net profit to $7.61 million, up 55.8 per cent from a proforma $4.88 million for H1 2006. K-Reit, a real estate investment trust for commercial properties, was listed in April last year.

For the first six months this year, K-Reit reported 36.8 per cent higher distributable income of $9.48 million. For Q2, the distribution per unit (DPU) rose 20.9 per cent to 2.14 cents from Q1’s 1.77 cents. The DPU for the first half is 3.91 cents, working out to an annualised 7.88 cents.

K-Reit’s portfolio includes Keppel Towers, GE Tower, Bugis Junction Towers and about 44 per cent of the strata area of Prudential Tower.

In a statement yesterday, the Reit’s manager, K-Reit Asia Management (KAM), said its portfolio’s committed occupancy climbed to 99.6 per cent. It also said that average gross rental rates reached $4.28 per square foot (psf) in June 2007, up from $3.65 psf for the same period in 2006.

Turnover for the quarter was $9.9 million compared with $8 million a year ago. For H1 2007, turnover was $18.7 million – a 17.7 per cent increase.

Net property income improved by 23.3 per cent to $13.75 million for H1 2007. For the quarter, net property income rose 30.4 per cent to $7.28 million.

KAM also said that with 70 per cent of the existing portfolio’s net lettable area due for renewal between 2007 and 2010, K-Reit was in a good position to ‘capitalise on the market upswing’. It added: ‘Strong underlying demand combined with limited quality office space will continue to support high occupancies and rental growth.’

K-Reit’s portfolio is valued at $677 million as at Dec 31, 2006. KAM said it has a target portfolio size of $2 billion over the next few years and the Reit is actively seeking acquisitions of prime commercial properties in Singapore and other other Asian growth cities. K-Reit is also reviewing possible asset enhancement initiatives to add value to the existing portfolio.