Month: August 2007
Allco – SGX
ALLCO REIT TO ACQUIRE COSMO PLAZA, OSAKA, JAPAN
1. Introduction
The Board of Directors of Allco (Singapore) Limited, as manager (“Manager” or “Allco Singapore”) of Allco Commercial Real Estate Investment Trust (“Allco REIT”) (SGX:ALLC), wishes to announce that it has signed, via a special purpose vehicle, a sale and purchase agreement with Yugen Kaisha Turtle Property (“Vendor”) on 31 July 2007 (“Agreement”) for the acquisition (“Acquisition”) of Cosmo Plaza, 15, Nankokita 1-chome, Suminoe-ku, Osaka, Japan (the “Property”).
2. Information on the Property
The Property is located in Nanko Cosmo Square, within Suminoe Ward, Osaka. The Property is linked by undercover sheltered walkways to a train station on the Nanko Port Town Line and to the surrounding buildings including the adjacent 5-star Hyatt Regency Hotel. The Nanko Port Town Line is part of the Mass Transit system of Osaka which currently serves the area from Central Osaka Station to Trade Center – Mae, with a 20 to 25 minute commuting time. Travelling time by taxi from central Osaka to the Property is approximately 15 minutes. The Property is being acquired on an assumed initial property yield of 5.19% for the first twelve
months.
3. Value of the Property
The Property was independently valued at ¥6.57 billion (S$83.3 million(2)) as at 30 May 2007 by K.K. Halifax Associates in accordance with instructions issued by British and Malayan Trustees Limited, as trustee of Allco REIT (“Valuation”). The Valuation was prepared using the cost approach, income capitalisation approach and discounted cash flow analysis.
(1) Calculated as 1 tsubo = 34.5 sq ft (Tsubo is a unit of measure in Japan.)
(2) ¥6.57 billion based on an exchange rate of S$1.00:¥78.9 as at 31 July 2007.
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Cambridge – BT
Cambridge Reit posts Q2 net of $8m
CAMBRIDGE Industrial Trust (CIT) yesterday reported distributable income of $8 million for the second quarter ended June 30, beating its forecast of $6.8 million. Distribution per unit (DPU) is 1.560 cents for the period, said Cambridge Industrial Trust Management (CITM), the manager of the trust. CIT was listed in July last year.
‘We’re pleased that our acquisition efforts are paying off,’ said Ang Poh Seong, CEO of CITM.
CIT’s total net distributable income of $8 million for the quarter represents an annualised yield of 6.62 per cent, based on the closing price of 94.5 cents per unit on June 29, he said.
Annualised DPU of 6.257 cents is 22.2 per cent more than the forecast DPU.
The trust said all its properties are signed with long leases ranging from 5 to 15 years, with fixed rental escalation. The weighted average remaining lease term of CIT’s existing portfolio of 32 properties remained stable at 7.15 years as at the end of June. CIT has a portfolio of 32 properties with 507,800 square metres of lettable area valued at $662.4 million.
About 41.6 per cent of the portfolio is in the logistics and warehousing sector, with the next significant segment in the light industrial space accounting for 32.8 per cent. The remaining properties are represented across a well-diversified spectrum of tenant uses such as car showrooms, self-storage facilities as well as industrial and warehousing.
The overall occupancy of CIT’s portfolio of 32 properties remained at 100 per cent.
CIT said: ‘The demand for quasi-offices will spill into the demand for light industrial space resulting from the current rental pressure on prime office space in the Central Business District.’
Fortune – BT
Fortune Reit H1 profit rises 1.5% to HK$143.3m
FORTUNE Real Estate Investment Trust has reported a net profit – income available for distribution – of HK$143.3 million (S$27.7 million) for the first half of 2007, up 1.5 per cent from a year ago.
Total revenue for the Reit, which holds 11 retail malls in Hong Kong, was down slightly by 0.8 per cent due to vacancies arising from repositioning and asset enhancement initiatives at some of its malls.
The Reit, which is partly owned by Li Ka-Shing’s Hong Kong flagship Cheung Kong Holdings and listed on the Singapore Exchange (SGX) mainboard, has not made any acquisitions since 2005.
Justin Chiu, chairman of ARA Asset Management, which manages the Reit, said, however, that due to the ‘stabilisation of the interest rate environment’, it could now be looking to acquire more properties.
‘We are looking at opportunities in China, but looking at it cautiously,’ he said, adding that ARA was also looking at properties in Hong Kong, and that Cheung Kong has, ‘a lot of properties’.
Fortune Reit has not revealed a target portfolio size. Mr Chiu said: ‘We don’t want to limit ourselves.’
Fortune Reit currently has a gearing ratio of 24.6 per cent. Based on the 35 per cent cap for Reits that are not rated, it estimates that it has a further debt flexibility of about HK$1.5 billion.
Mr Chiu also emphasised that Fortune Reit could raise its gearing to 60 per cent to fund future acquisitions if required. He said the Reit might seek a rating, depending on the size of possible acquisitions. ‘It only takes about a month to get a rating,’ he added.
The portfolio’s base rent also increased by 4.8 per cent to HK$24.54 psf on a year-on-year basis.
Fortune Reit reported yesterday that its annualised tax exempt yield was 5.4 per cent based on the closing unit price of HK$6.60 as at June 29. At the close of trading yesterday, Fortune Reit ended at HK$6.25 per unit, up five cents.
Rental reversion for renewals in H1 was 11 per cent. The better performing malls such as Ma On Shan Plaza, Waldorf Garden Property and City One Shatin Property registered rental reversions of 40 per cent, 18.7 per cent and 11.4 per cent respectively.
CDLHTrust – BT
CDL Hospitality Trusts’ Q2 earnings beat forecasts
Income available for distribution to holders of stapled securities is $14.8m
CDL Hospitality Trusts (CDL HT) has reported better-than-projected earnings for the second quarter. CDL HT – a stapled group comprising CDL Hospitality Real Estate Investment Trust (H-Reit) and CDL Hospitality Business Trust – said yesterday its income available for distribution to holders of stapled securities amounted to $14.8 million, from April to June this year. That’s 52 per cent higher than the $9.8 million which it projected, in its initial public offering (IPO), that it would earn during the three-month period.
Second-quarter gross revenue was $20.7 million, 48 per cent higher than projected. Its net property income totalled $19.5 million, 52 per cent higher than forecast, and its net income amounted to $18.0 million, more than double the $8.7 million expected.
Its income available for distribution per stapled security came to 2.11 cents for the period – and 8.46 cents on an annualised basis. The total number of stapled securities was 702.4 million. Its annualised distribution yield was 10.19 per cent, based on its IPO price of 83 cents, and 3.69 per cent, based on its closing market price of $2.29 on Monday.
For the entire half-year period from January to June this year, CDL HT reported income available for distribution to holders of stapled securities of $27.1 million – some 40 per cent more than projected. Its revenue was $38.7 million, 38.8 per cent more than IPO projections.
CDL HT listed on the Singapore Exchange on July 19. It now owns five hotels and one shopping arcade in Singapore – Orchard Hotel, Grand Copthorne Waterfront Hotel, M Hotel, Copthorne King’s Hotel, Orchard Hotel Shopping Arcade and Novotel Clarke Quay – as well as one hotel in New Zealand, the Rendezvous Hotel Auckland.
The trust also said it had benefited from the positive growth of the tourism and the hotel sector. Its average occupancy rate in the January-June half was 84.4 per cent, against an indicative 78.6 per cent. Its average daily room rate was $193 for the six months, against an indicative $160.
‘CDL HT has grown and performed very well in the last six months,’ said Vincent Yeo, CEO of M&C Reit Management Limited, manager of H-Reit. ‘As Singapore’s largest hotel operator by number of rooms, we are well-positioned to capitalise on the current growth in the tourism and hotel sectors. In addition to the strong organic growth inherent in our portfolio, we will continue to seek yield-accretive acquisition opportunities to deliver higher returns to our security holders.’