Month: July 2007
FrasersCT – SGX
Frasers Centrepoint Trust 3Q07 Results
- 3Q07 DPU of 1.67 cents, up 14.4% from IPO forecast of 1.46 cents
- Track record of strong organic growth continues
Singapore, 24 July 2007 – Frasers Centrepoint Asset Management Ltd. (“FCAM”), the Manager of Frasers Centrepoint Trust (“FCT”), is pleased to announce that FCT’s distributable income for third quarter 2007 (period 1 April to 30 June 2007), was S$10.3 million. This translates to a distribution per unit (“DPU”) of 1.67 cents, an increase of 14.4% compared to the forecast.
Gross revenue for third quarter 2007 was S$18.9 million, and net property income was S$12.6 million, in line with the forecast. More than 90% of new and renewed leases in third quarter 2007 were from Causeway Point, which secured rental renewal rates of more than 10% above preceding rental rates to continue the trend of strong and sustainable rents at FCT’s malls. In the quarter, Northpoint extended five expiring leases for a period of one-year in anticipation of its pending asset enhancement in FY 2008.
High Portfolio Occupancy Rates On the Back of Rising Demand
The weighted average occupancy rate of FCT’s portfolio was 92.9% as at 30 June 2007, with Causeway Point and Northpoint achieving occupancy rates of 100.0% and 99.0% respectively. Anchorpoint’s occupancy rate was 39.1% pursuant to the exercise to vacate sections of the mall for asset enhancement and repositioning works.
Asset Enhancement Initiative Update: Anchorpoint
The asset enhancement initiative to reposition Anchorpoint with a village-mall concept offering a wider range of F&B and fashion options is on schedule for completion at the end of November 2007. Close to 80% of the mall has been committed or in advanced stages of discussions. Confirmed major tenants include Cold Storage and Kou Fu which will operate a supermarket and food court respectively. Other new comers to Anchorpoint include The Coffee Connoisseur (TCC), Xin Wang, Kopi Alley, Times the Bookstore, SK Jewellery, Capitol Optical, Club Marc, Reading Place and Jollibean. Anchorpoint’s asset enhancement is expected to increase the average rental rate of the mall by over 35% to approximately S$7.00 per sq ft.
Acquisition of Hektar REIT
In June 2007, FCT announced the completion of the acquisition of 86.4 million units or 27% of the issued units in Hektar Real Estate Investment Trust (H-REIT), Malaysia’s only pure retail REIT listed on Bursa Malaysia Securities Berhad. The cost of the investment was RM104.5 million (approximately S$46.6 million1) at RM1.21 per H-REIT unit. The cornerstone investment in H-REIT provides FCT with a yield-accretive investment in an underlying portfolio of prominent and high quality suburban regional malls in Malaysia, namely Subang Parade in Selangor and Mahkota Parade in Melaka. These retail malls have a total net lettable area of approximately 944,500 sq ft, house more than 230 major international and domestic retailers, and enjoy a combined visitor traffic of more than 279,000 persons per week. H-REIT is expected to increase FCT’s DPU by 0.21 cents on an annualized basis, or 3.5% over the forecast for the year ending 30 September 2007 as disclosed in FCT’s prospectus dated 27 June 2006.
“We are pleased with the continuing development and prospects of FCT. Occupancies and rental reversions remain strong. Anchorpoint’s upgrading is on track for completion to capture the year-end festive season and the strategic investment taken this quarter in H-REIT will start to make its maiden contribution in the next quarter,” said Mr Christopher Tang, Chief Executive Officer, Frasers Centrepoint Asset Management Ltd., the Manager of Frasers Centrepoint Trust.
1 Based on an assumed exchange rate of RM1.00 = S$0.4456
Source : SGX
MMP – DBS
Looking forward to next year’s bonus
Potential bonus for MMP next year – Toshin lease renewal. We highlight a key point in terms of organic growth for MMP, with its master lease with Toshin up for renewal in June 08. The master lease is expiring in 2013 with an option to renew for another 12 years. Under the lease arrangement, rents are reviewed every three years with a maximum upward revision of 25%. With the master lease currently under-rented at around the S$11 psf level, we think there is a potential for the next rental review to edge towards the higher end of the 25% cap on positive rental revision.
Acquisitions momentum still at an early stage? To recap, MMP has recently begun its cross-border acquisition growth path with i) acquisition of a portfolio of seven properties in Japan for MMP’s debut deal; and ii) 50% of retail asset, Renhe Spring Department Store for RMB150m in Chengdu. Moving forward, MMP has also secured ROFR on vendor Renhe’s property ventures, which could imply an alternative acquisition pipeline for MMP gaining more momentum moving forward in terms of acquisitions in the absence of a developer sponsorship.
Enjoying office rental reversions. With the very tight office supply situation in the CBD, other alternative office locations are also enjoying positive spillovers. Asking rents for Wisma Atria and Ngee Ann City are already at S$13 and S$12 respectively and we expect closing rents to edge upwards.
Maintain Buy with raised TP of S$1.48. We are raising our target price on the premise of two factors: I) Assuming a base case scenario of bargaining power shared between landlord and tenant, we now impute a potential rise in retail rentals for the Toshin lease to 12.5% when the renewal is up; and ii) higher imputed office rents of S$11 and S$12 for Ngee Ann City and Wisma Atria respectively. This leads to our higher DCF-based target price of S$1.48 and maintain our Buy recommendation. Key risks to our recommendation include i) inability by the REIT manager to secure positive renewal rates for the Toshin lease and ii) acquisitions from third-party assets do not gather pace to imply growth justifying yield compression.
First REIT – UOBKH
2Q07: Results Slightly Ahead of Forecast, More Plans Revealed
Results slightly ahead of forecast. First REIT’s Q2 results came in slightly better than its earlier forecasts. A S$6.50m net property income was achieved (8.6% ahead of its forecast), translating into a DPU of 1.65 Scts (6.59 Scts on an annualised basis), or 3.8% higher than its forecast. The increase in revenue and distributable income was attributed to maiden contributions from its three recent acquisitions (Lengkok Nursing Home, Senja Nursing Home and Lentor Nursing Home).
Asset enhancements to Adam Road Hospital. Besides the recent three nursing homes acquisitions, First REIT has also just completed its fourth acquisition of Adam Road Hospital. It intends to undergo major asset enhancements to Adam Road Hospital and will convert it from a primarily psychiatric hospital to one which provides mainly general hospital services such as day-care surgery and dental services for higher profitability. Post enhancements, psychiatric services will only contribute a small portion to its revenue.
Pipeline of hospitals identified for steady acquisition trail. With the addition of four new properties, total portfolio asset size of First REIT currently stands at about S$308m. We believe it is on track to meet management’s target portfolio of S$500m by 2009. It is already in negotiations to acquire an asset in China, and also seriously looking for opportunities in key cities (Beijing, Shanghai and Shenzhen) of China, Malaysia, Vietnam, Philippines, and Thailand. Besides acquiring assets from other vendors in the region, First REIT is also exploring potential asset injections from its sponsor, Lippo Karawaci. Potential pipeline includes Siloam Hospital Lippo Cikarang, Siloam Hospital Semanggi, which will house Indonesia’s first private cancer treatment centre (due completion in Dec 08), and also any potentially upcoming hospitals from expansion plans by Lippo Karawaci at Siloam Hospitals West Jakarta and Siloam Hospitals Surabaya.
Higher investors’ interests as more plans unravel. First REIT has been trading with low liquidity since launch, with a yield of 8.19% (based on 20th July 07’s closing price). We expect liquidity to improve as it unravels more plans which will generate investors’ interest.
Cambridge – SGX
CIT ACQUIRES THREE PROPERTIES FOR A TOTAL OF S$108.5 MILLION
The Proposed Acquisition
Cambridge Industrial Trust Management Limited (the “Manager”), the Manager of
Cambridge Industrial Trust (“CIT”), has identified the following Properties to be acquired by CIT (collectively known as the “Acquisitions”).
– 1 Tuas Avenue for a purchase price of S$32,500,000. DPU Impact : +0.0597 cents(2);
– 120 strata units of Enterprise Hub located at 48 Toh Guan Road East for a purchase
price of S$71,000,000. DPU Impact : +0.0937 cents(2); and
– Natural Cool Building located at 81 Defu Lane 10 for a purchase price of S$5,000,000. DPU Impact : +0.0077 cents(2)
(2) Based on simple annualisation on the audited results for the financial period ended 31 December 2006 and the assumption that CIT had purchased, held and operated the respective property for the same annualised period based on long term gearing ratio of 40%.
Note : The above is a modified short extract. For a full version, go to SGX Announcements (Click on link below)
Source : SGX
First REIT – SGX
First REIT’s 2Q07 distributable income up 3.8% to $4.5M as healthcare portfolio grows
Maiden contribution from three recently acquired nursing homes
2Q07 DPU of 1.65 Singapore cents represents an annualised distribution yield of 8.19%
Successfully completes fourth acquisition this year – Adam Road Hospital
SINGAPORE – 23 July 2007 – Bowsprit Capital Corporation (the “Manager”), the manager of First Real Estate Investment Trust (“First REIT”), Singapore’s first healthcare real estate investment trust, today announced that First REIT’s distributable income of S$4.5 million for the second quarter of FY2007 ended 30 June 2007 exceeded forecast by 3.8%.
At the same time, First REIT is also pleased to announce that it has successfully completed the acquisition of Adam Road Hospital for a purchase consideration of S$14.9 million. This represents First REIT’s fourth completed acquisition since its listing in December 2006 and clearly demonstrates its commitment to expand its asset portfolio and strengthen property income.
In the second quarter of FY2007, First REIT’s net property income rose 8.6% to S$6.5 million as maiden contributions from its three recently-acquired nursing homes in Lengkok, Senja and Lentor kicked in. Both the Lengkok and Senja nursing homes were acquired on 11 April 2007, while the acquisition of Lentor nursing home was completed on 8 June 2007.
First REIT’s distribution per Unit (“DPU”) for the second quarter was 3.8% higher than forecast, amounting to 1.65 Singapore cents, representing an annualised yield of 8.19% based on the closing price of S$0.805 per Unit on 20 July 2007.
The Books Closure and Distribution Payment dates are 1 August 2007 and 29 August 2007 respectively.
Commenting on First REIT’s results, Dr Ronnie Tan, Bowsprit’s CEO said, “We believe that our yield of 8.19% continues to be one of the highest among Singapore REITs. With a clear focus in Asia’s booming healthcare sector, First REIT offers investors a unique and growing asset class which holds immense potential for yield and capital growth. We are well on an aggressive acquisition trail and the Management is confident of raising our asset portfolio to S$500 million before 2009.”
Indeed, since its listing in December 2006, First REIT has expanded its asset base by about 20%. It currently has eight healthcare assets totalling S$308.0 million, compared with four assets at S$257.0 million at IPO last year.
Capital Management
To fund its acquisitions, First REIT has in place a clear financing structure with a S$90 million term loan facility with the Oversea-Chinese Banking Corporation. S$51 million of the proceeds have been utilised to date for First REIT’s acquisitions. Including the latest acquisition of Adam Road Hospital, First REIT’s gearing stands at 16.5%.
“Compared with other REITs, our gearing is still relatively low and this gives us headroom to undertake more accretive acquisitions. We are currently in active negotiation with a number of vendors in the region, which we hope will lead to a few additional acquisitions soon,” added Dr Tan
Potential Acquisitions
Besides acquiring assets from other vendors in the region, First REIT is also exploring potential acquisitions with its Sponsor, Lippo Karawaci.
Potential pipeline includes Siloam Hospitals Lippo Cikarang, and a 29-storey, 210-bed specialist hospital, called Siloam Hospital Semanggi, which will house Indonesia’s first private cancer treatment centre with state-of-the-art equipment – the Mochtar Riady Comprehensive Cancer Centre (“MRCCC”). Collectively known as the “Building of Hope”, Siloam Hospital Semanggi and MRCCC is expected to be completed and operational by December 2008.
In addition, according to Lippo Karawaci, expansion plans are underway at Siloam Hospitals West Jakarta and Siloam Hospitals Surabaya. When completed, First REIT has the option of acquiring the expanded real estate under terms of the Master Lease agreement.
“First REIT has the benefit of a regional reputable sponsor that is committed to expanding its healthcare business. With the first right of refusal under terms of the Master Lease agreement, Lippo Karawaci’s growing healthcare facilities form a solid pipeline of potential acquisitions for us, while we continue to explore other acquisition targets in the region,” added Dr Tan.
Barring unforeseen circumstances, First REIT is confident of delivering on its 2007 forecast distribution of 6.51 cents.