Month: April 2009
MI-REIT – BT
MI-Reit meets terms for loan extension
MACARTHURCOOK Industrial Reit (MI-Reit) yesterday said that it has satisfied all conditions to get a 60-day extension for its $220.8 million loan facility, which was originally due to expire today.
With the extension, the loans will instead be due on June 16 this year. MI-Reit’s manager remains in advanced negotiations with its lenders in relation to the refinance of the facility, the Reit said.
MI-Reit first said on March 31 that its lenders, National Australia Bank and Commonwealth Bank of Australia, had granted it a 60-day extension for the $220.8 million loan facility. But the extension for the property trust was subject to documentation and satisfaction of certain conditions, which have now been satisfied, MI-Reit said.
On April 1, Moody’s Investors Service downgraded MI-Reit’s corporate family rating from B1 to B2, and added that it was continuing its review of the rating for possible further downgrade. The downgrade reflected the existence of heightened liquidity pressure, given that the company had not yet secured definitive long-term refinancing for its loan originally due on April 18, 2009, Moody’s analyst Kathleen Lee said then.
As at Dec 31, 2008, MI-Reit had $225 million repayable within a year and its gearing ratio stood at 39.7 per cent. The trust lost half a cent to close at 26.5 cents yesterday.
AREIT – BT
A-Reit full-year DPU rises 7.4%
ASCENDAS Real Estate Investment Trust (A-Reit) yesterday reported a distribution per unit (DPU) of 3.23 cents for its fourth quarter ended March 31. This raised full-year DPU to 15.18 cents, a rise of 7.4 per cent on the back of sturdy growth in rental and occupancy rates.
The Q4 DPU of 3.23 cents was 12.5 per cent lower than the year-ago DPU of 3.69 cents. A-Reit said this was because of dilution by new units and the payment of performance fees in cash for the year. Otherwise, Q4 DPU would have been 3.8 cents, a rise of 3 per cent.
Full-year net property income (NPI) grew 21.8 per cent to $296.6 million, with organic growth – rentals and occupancy rate growth – contributing 39.3 per cent of the NPI growth. The rest of NPI growth was derived from investment and development projects completed over the course of the year.
A healthy portfolio occupancy of 97.8 per cent was achieved while occupancy rate for multi-tenanted properties was 95.3 per cent as at March 31, thanks to active leasing efforts by the property manager. Positive rental reversion in renewal rental rates was seen across the portfolio.
For the year, A-Reit completed three development projects at a total development cost of $178.2 million and made two acquisitions totalling $271.8 million.
A-Reit recorded a revaluation loss of 2.5 per cent to about $4.43 billion as at March 31 following a portfolio revaluation.
The NPI outlook for fiscal 2009 is expected to be about the level achieved for fiscal 2008, the trust manager said.
But with the expected higher cost of borrowing, distribution income may be lower and will also spread over a larger unit base due to recent fund-raising exercises.
A-Reit expects to keep a payout ratio of 100 per cent of distributable income, a policy it has maintained since listing, Tan Ser Ping, CEO of the trust manager, told reporters and analysts at a briefing last evening.
Explaining the payment of performance fee in cash, Mr Tan said: ‘This is to minimise the gap between the earnings per unit (EPU) and DPU to avoid paying distribution out of capital.’
Some 14.1 per cent of portfolio gross revenue is due for renewal over the next 12 months.
The current passing rentals for space due for renewal in some sub-sectors of the portfolio are lower than the spot rates and Mr Tan said he expects this weakness to persist for a while.
A-Reit has a total development pipeline costing $158.7 million. Some $132.7 million of investment is committed, of which $76.3 million has been spent and another $56.4 million of development cost require funding.
‘Over time, there may be some distressed assets opportunities that may come along but our focus is on high-quality tenants and properties that have good potential in terms of upside,’ Mr Tan said.
To strengthen its balance sheet and fund committed development projects, A-Reit raised $408 million in January and February through a private placement and a preferential offer. As at March 31, its aggregate leverage was 35.5 per cent, down from 38.2 per cent a year ago.
It also secured new loans of $200 million and incorporated a $1 billion medium term note (MTN) programme. Some 90 per cent of interest rate exposure is hedged into fixed rate for the next 3.4 years with weighted average all-in funding cost of 3.67 per cent.
Its interest cover ratio as at March 31 was 4.6 times, down from 5.1 times a year ago.
A-Reit’s $300 million of commercial mortgage backed securities that will mature this year will be repaid by existing credit facilities while its $246 million revolving credit facilities due this year will be partially paid down and partially refinanced.
CRCT – BT
CRCT mindful of downturn’s impact
THE mall business in China has held up so far but CapitaRetail China Trust (CRCT) is mindful of the economic downturn’s impact on rents and occupancies.
The trust shared this view yesterday as it reported a net property income of $19.1 million for the first quarter ended March 31, 2009 – a 33.5 per cent increase from a year ago.
Income available for distribution rose 51.3 per cent to $13.3 million. This results in a distribution per unit (DPU) of 2.14 cents, exceeding the 1.55 cents in Q1 2008.
On an annualised basis, CRCT’s DPU in Q1 2009 was 8.68 cents, providing a distribution yield of 11.8 per cent based on the unit closing price of 73.5 cents on March 31. The trust gained half a cent to close at 92 cents yesterday.
CRCT attributed the stronger results to the rise of the Chinese yuan against the Singapore dollar; the acquisition of Xizhimen Mall in Beijing; and year-on-year rental growths at three other malls.
Shopper traffic and same-store sales have ‘held up well’ despite challenging economic conditions, registering year-on-year growth of 2 per cent and 2.2 per cent in Q1 2009 respectively, the trust said. New leases and renewals were also committed at rents which were 1.8 per cent above their preceding rates.
Nevertheless, trust manager CapitaRetail China Trust Management Limited’s CEO Wee Hui Kan highlighted that the trust is mindful of the global slowdown’s effect on consumer sentiments.
‘Retailers have also become more cautious in their expansion plans, and this would have an impact on rental growth and occupancy levels at our malls,’ he said.
The trust manager’s focus this year is to maintain occupancy levels at its malls, and to work closely with tenants to drive shopper traffic and sales. The ‘proactive management strategy will serve to ensure a stable and sustainable distribution to unitholders in 2009, and position us in good stead for an economic upturn’, added Mr Wee.
CRCT’s gearing ratio as at March 31 stood at 33.1 per cent, and it has borrowings of $65.2 million maturing in 2009.
CMT – BT
CMT Q1 distributable income climbs 8%
This is after addition of one property to its portfolio and completion of improvements at two others
CAPITAMALL Trust (CMT), Singapore’s biggest property trust, said that its first-quarter distributable income climbed 8 per cent after it added one property to its portfolio and completed improvements at two others.
Distributable income rose to $62.6 million for the first three months of 2009, compared with $58 million a year earlier.
But distribution per unit (DPU) fell to 1.97 cents from 3.48 cents a year ago as the trust did a rights issue in Q1. The proceeds of $1.2 billion from the rights issue will be used to repay borrowings due in 2009.
The trust said that rental renewal rates in Q1 2009 saw a moderate growth of 1.3 per cent over preceding rental rates. Based on committed leases as at March 31, 2009, the trust’s gross revenue locked-in for 2009 exceeds 90 per cent of gross revenue for the whole of 2008. But despite this, CMT is cautious on its outlook.
‘The revenue outlook for CMT will depend on the extent, depth and duration of the economic recession and financial uncertainties on CMT’s tenants as well as new demand for retail space,’ said Lim Beng Chee, chief executive of the trust’s manager.
Retail sales in Singapore fell for the fifth straight month in February, easing 5.7 per cent, official data released recently showed. CMT yesterday reiterated that it is managing its costs and working closely with tenants to ‘align the trademix promptly in line with the environment’.
‘We also have in place a slew of measures to help our tenants, ranging from restructuring of leases, reviewing of space efficiency to working with tenants on various promotional fronts,’ said Mr Lim.
The trust’s Q1 2009 net property income rose 9.1 per cent to $92.4 million, from $84.7 million in Q1 2008, mainly from the acquisition of The Atrium@Orchard and completion of asset enhancement initiatives at Sembawang Shopping Centre and Lot One Shoppers’ Mall. Gross revenue rose to $134.5 million, an increase of 11.1 per cent over Q1 2008.
CMT also said it is currently in talks with the authorities to optimise the integration plan for The Atrium@Orchard and Plaza Singapura, and aims to start work by end-2010, subject to market conditions and approvals from the relevant authorities. The trust also plans to start enhancement works at Jurong Entertainment Centre by the end of the year, it added.
CMT’s revenue was in line with expectations, said Kim Eng analyst Wilson Liew, who issued a fresh ‘buy’ call on the stock yesterday. ‘Its portfolio that is geared towards necessity spending should provide more resilience under current economic conditions. Its balance sheet has been substantially strengthened following the rights issue,’ he noted.
CMT shares gained one cent to close at $1.30 yesterday.