Month: January 2010
PLife – CIMB
Asset enhancements and acquisitions coming up
• Full-year above expectations; maintain Outperform. FY09 DPU met Street expectations but exceeded our expectations (109% of our estimate) due to lowerthan-forecast interest expenses. We maintain our FY10-11 estimates and introduce FY12 estimates. Our DDM-based target price is intact at S$1.57 (discount rate 7.2%). PLife REIT trades at 0.96x P/BV and a forward yield of 6.6%. Maintain Outperform on potential acquisition catalysts.
• Full-year DPU of 7.74cts (CIMB-GK 7.11cts). This represents a dividend yield of 5.8%. Net property income of S$62m for the full year was up 23% yoy following contributions from newly-acquired Japanese nursing homes in 2009 and higher rent from Singapore hospitals as a result of a high growth rate for the inflation-linked CPI +1% formula. Distributable income of S$46.7m and full-year DPU of 7.74cts increased 13% yoy to exceed our expectations following lower-than-forecast interest expenses. PLife’s REIT’s assets were revalued at S$1.15bn in Dec 09, gaining S$29m. NAV/unit in Dec 09 increased to S$1.39 (including distributable income) from S$1.34 in Dec 08.
• Asset leverage remained low at 28%. In 2H10, S$34m (10.5% of total debt) of debt will be due for refinancing. Management guides that new interest rates are likely to remain the same, if not lower. Interest cover remained high at 6.8x. Additionally, interest rates have been fixed for 100% of its debt, which eliminates uncertainties from fluctuating interest rates.
• Asset enhancements and acquisitions in 2010. Management will commence asset enhancement work, likely to concentrate in Singapore hospitals. Additionally, it will continue to look for accretive acquisitions in the region. We anticipate more acquisitions in Japan, and possibly Australia and Malaysia.
a-iTrust
Ascendas India Trust’s Q3 distributable income falls 8%
ASCENDAS India Trust has recorded distributable income of $14.1 million for its third financial quarter ended Dec 31, 2009, down 8 per cent from a year ago.
Distribution per unit (DPU) for Q3 was 1.85 cents, also lower by 8 per cent.
Total property income for the quarter was $29.9 million, which was 4 per cent higher than the corresponding quarter last year. Net property income was $19.3 million, up 13 per cent.
The trust’s portfolio of 4.8 million sq ft of completed space is fairly evenly distributed among Bangalore, Chennai and Hyderabad. The properties house 248 tenants operating in various IT sub-sectors such as software development, business process offshoring, research and development, and data centres.
Portfolio occupancy remained high at 97 per cent as at Dec 31, 2009, while tenant retention rate over the last nine months was 79 per cent, the trust said.
Jonathan Yap, chief executive officer of Ascendas Property Fund Trustee Pte Ltd, the trustee-manager, said: ‘We are pleased to report another strong portfolio performance in the third quarter. Indicators are suggesting that an economic recovery is well underway.’ The Indian economy grew 7.9 per cent year-on-year in the quarter ended September 2009.
‘We will focus on positioning the trust to benefit from further improvements in the general operating environment,’ he said.
The trust will continue to focus on growing the operating earnings of its assets by actively managing the portfolio, optimising its capital structure, and further growing the portfolio through developing the land it owns and pursuing yield accretive acquisitions.
FirstREIT – BT
First Reit Q4 distributable income down 0.6%
FIRST Real Estate Investment Trust (First Reit), Singapore’s first healthcare real estate investment trust, posted a distributable income of $5.3 million for the fourth quarter ended Dec 31, 2009, down 0.6 per cent from a year ago, its manager Bowsprit Capital Corporation reported yesterday.
Distribution per unit (DPU) for Q4 2009 was one per cent lower at 1.92 cents. Based on its closing price of 86 cents on Jan 20, 2010 and the annualised DPU of 7.62 cents, First Reit said that it has a distribution yield of 8.86 per cent.
Gross revenue and net property income inched up 1.4 per cent and 1.2 per cent to $7.7 million and $7.6 million, respectively.
On a full-year basis, distributable income increased 0.6 per cent to $21 million on the back of a 0.7 per cent rise in gross revenue to $30.2 million.
‘The recent global recession has demonstrated the resilience of the healthcare business, particularly in Asia which continues to perform well,’ Bowsprit said. First Reit’s portfolio consists of eight properties located in Indonesia and Singapore.
‘We are heartened that our hospitals in Indonesia have continued to perform well despite the global financial crisis last year. The variable rental component, in addition to the fixed annual rental escalation, will mean higher revenue to be generated by our Indonesian assets for FY2010,’ said Ronnie Tan, Bowsprit’s chief executive officer.
In Indonesia, First Reit’s Siloam Group of hospitals has witnessed robust growth in demand for services and higher occupancy, it said.
In Singapore, where First Reit owns three nursing homes, the group reported that prospects for private nursing care are bright in view of a steadily aging population and the government’s recent push to boost and raise awareness of palliative care services. ‘All these factors will help to underscore the current and future demand for quality nursing homes and eldercare facilities for short and long-term convalescent, respite and rehabilitative care’.
The Reit will continue to look at ways to enhance its nursing homes in Singapore. Plans are being proposed for extension works at the Lentor Residence. First Reit has also commenced comprehensive asset enhancement works for its Adam Road Hospital since November last year with completion targeted for mid-2011.
The cost of asset enhancement works, estimated at $18.6 million, will be funded through debt, and will raise First Reit’s gearing from 15.5 per cent as at Dec 31, 2009 to just below 20 per cent upon completion – which will still be lower than the regulatory limit of 35 per cent.
‘Our tight capital management and low gearing, coupled with the fact there is no refinancing requirement until 2012, have provided First Reit with ample headroom to pursue acquisition opportunities and carry out further asset enhancement works to provide best-in-class service for our patients. With improving market conditions, we are currently exploring acquisition opportunities with our sponsor, PT Lippo Karawaci Tbk and other third parties to expand our portfolio of yield accretive properties and raise our overall asset base,’ said Dr Tan.
As at Dec 26, 2009, First Reit’s eight properties were revalued at $340.9 million, representing an increase of $16 million over book value as at end December 2008.
First Reit will maintain a payout policy of 100 per cent of distributable income for FY2010.
The Reit last traded at 86 cents.
PLife – BT
PLife Reit racks up 11.6% growth in Q4 distributable income
PARKWAY Life Real Estate Investment Trust (PLife Reit) posted an 11.6 per cent year-on-year increase in distributable income to $12.38 million for the fourth quarter ended Dec 31, 2009.
Distribution per unit (DPU) for the quarter amounted to 2.05 cents versus 1.84 cents in Q4 2008, which translates to a full year DPU of 7.74 cents and a 6.34 per cent distribution yield. In FY08, PLife Reit achieved a full year DPU of 6.83 cents.
For Q4 2009, gross revenue rose 9.7 per cent to $17.7 million compared to the same period last year.
Both property expenses and financing costs rose during the quarter as a result of the eight nursing homes acquired in November last year. Property expenses for Q409 were $0.2 million higher at $1.3 million and finance costs rose from $2.05 million to $2.24 million.
For the full year of 2009, distributable income came in at $46.7 million, a 13.4 per cent increase from the previous year.
Gross revenue surged by 23.7 per cent year-on-year from $53.89 million to $66.68 million, on the back of revenue contributions from properties in Japan acquired in 2008 as well as from the eight new nursing homes. Higher rent from the Singapore hospital properties – comprising Mount Elizabeth Hospital, Gleneagles Hospital, and East Shore Hospital – also boosted revenue.
The acquisition of the nursing homes brought PLife Reit’s total portfolio size, as at Dec 31, 2009, to 21 properties worth $1.15 billion, up 9.5 per cent from $1.05 billion in the previous year. It has a 100 per cent occupancy rate across its entire portfolio.
Yong Yean Chau, CEO of Parkway Trust Management, said: ‘Given our strong financial position, we were able to time the market and acquire quality properties in the fourth quarter at a very attractive pricing. We also saw our maiden asset enhancement initiative (at its Japan pharmaceutical product distributing and manufacturing facility P-Life Matsudo) thereby boosting our income stream further.’
The distribution payment will be made on Feb 26.
CMT – BT
CMT’s Q4 distributable income rises 25.5%
HIGHER gross revenue from five malls has contributed to CapitaMall Trust (CMT) achieving a 25.5 per cent year-on-year surge in distributable income to $76.5 million for its fourth quarter ended Dec 31, 2009.
This in turn led to a 24.4 per cent surge in distribution per unit (DPU) to 2.4 cents for the three months.
The quarter’s DPU brought the total DPU for the 2009 full year to 8.85 cents, translating to a distribution yield of 4.97 per cent based on CMT’s closing price of $1.78 per unit yesterday.
Q4 gross revenue rose by 4.2 per cent to $140.1 million as five of CMT’s malls completed enhancement works and operating expenses fell.
For the year ended Dec 31, distributable income rose 18.3 per cent to $281.97 million while gross revenue grew 8.2 per cent to $552.7 million.
As at Dec 31, CMT’s occupancy weighed in at 99.8 per cent for its portfolio – which includes malls such as Junction 8, Tampines Mall and Plaza Singapura – up from 99.7 per cent as at Dec 31, 2008.
CMT has also commenced asset enhancement initiatives at Jurong Entertainment Centre and Raffles City, which are slated for completion in Q1 2012 and end-2010 respectively.
CMT is projecting an 8 per cent return on investment on its $200.32 million capital expenditure. The new Jurong Entertainment Centre will include an Olympic-sized ice skating rink.
Meanwhile, CMT is also working on reconfiguring the basement of Raffles City and constructing a new underground link which will add 12,180 square feet of net lettable area. Sixty-three per cent of this area has already been taken up.
Simon Ho, CEO of CapitaMall Trust Management Limited (CMTML) said yesterday: ‘We will be actively on the look-out for malls to buy . . . but we will be disciplined in our approach.’
He noted that the properties have to be yield-accretive and the income stream has to be sustainable.
CMT is also upbeat that the retail industry will benefit this year as the economy continues to pick up.
‘The improving economy and the opening of the two integrated resorts in 2010 should have a positive impact on the retail sector,’ said CMTML chairman James Koh.
Unitholders will receive the Q409 DPU on Feb 26.