MP REIT – BT

MP Reit’s DPU up 15.6%

Its rental income remains strong in Q3 despite challenging market

MACQUARIE Pacific Star, the manager of MP Reit, said yesterday that the trust’s third-quarter distributable income was $17.2 million.

Distribution per unit (DPU) for the period July 1 to Sept 30 was 1.78 cents, 15.6 per cent higher than 1.54 cents in the previous corresponding period. On an annualised basis, the latest distribution represents a yield of 8.58 per cent.

Gross revenue for MP Reit was $32.6 million, or 24.8 per cent higher than the $26.1 million in the corresponding quarter a year ago. This was driven mainly by higher rents achieved from renewals, new leases and revenue from the overseas properties. Net property income was higher at $23.6 million, an increase of 21.7 per cent from a year earlier.

Stephen Girdis, chairman of Macquarie Pacific Star, said that rental income remained strong in Q3 ‘despite the current challenging market’.

Franklin Heng, Macquarie Pacific Star’s CEO, added: ‘The supply of new office space in Orchard Road in the next few years is limited and we expect to still reap some rent reversions from office leases expiring in the next year.’

Commenting on Tuesday’s announcement that YTL Corporation has entered into a sale-and-purchase agreement to acquire Macquarie Group’s 26 per cent stake in MP Reit and a 50 per cent stake in the holding company of Macquarie Pacific Star, the officials said that in the challenging environment and in the midst of a strategic review, no firm offer to acquire 100 per cent of MP Reit’s units or its investments was received.

‘In light of the above, MP Reit’s strategic review has been concluded and Macquarie Pacific Star looks forward to working with the new sponsor, YTL Corp, in the interests of unitholders, in assessing and implementing the new strategic initiatives available to MP Reit,’ the trust manager said.

MP Reit refinanced $220 million through a club deal with three foreign banks in August 2008. As at Sept 30, MP Reit’s gearing level was 28.9 per cent, and 89.4 per cent of its borrowings were fixed.

It ended trading yesterday up one cent to $0.55.