Month: July 2010
FCOT – BT
FCOT DPU for Q3 up 39% to 0.25 cent
FRASERS Commercial Trust (FCOT) said income distributable to unit-holders increased 39 per cent year on year to $7.7 million for its third quarter ended June 30.
Distribution per unit (DPU) for the quarter is 0.25 cent, also up 39 per cent. This takes DPU for the first three quarters to 0.81 cent, an increase of 21 per cent from the same period last year.
FCOT recorded a 29 per cent rise in gross revenue of $29.2 million and a 33 per cent increase in net property income to $22.7 million in Q3.
Total distributable income was up 123 per cent year on year to $12.4 million. This was mainly due to full-quarter contributions from Alexandra Technopark, a stronger Australian dollar and lower finance costs due to reduced borrowings and lower interest rates.
$4.7 million has been set aside for distribution to Series A Convertible Perpetual Preferred Units (CPPU) holders.
FCOT’s portfolio occupancy rate was 93.1 per cent at June 30, up 0.7 per cent from Q2, due to a rise in occupancy at its KeyPoint and Galleria Otemae properties.
The average occupancy rates for Singapore and Australian properties remained healthy – above 95 per cent – and they contribute more than 90 per cent of portfolio net property income, said FCOT. The portfolio’s weighted average lease term to expiry is about 4.1 years.
There is no distribution payment for Q3, as FCOT distributes semi-annually.
CDL H-Trust – BT
CDLHT Q2 distributable income rises 38.7%
CDL Hospitality Trusts (CDLHT) posted a stronger set of results for the second quarter ended June 30, 2010 as hospitality performance improved across its portfolio.
CDLHT – which comprises CDL Hospitality Real Estate Investment Trust and CDL Hospitality Business Trust – registered a 38.7 per cent year-on-year increase in income available for distribution to $24.1 million for Q2 2010.
Gross revenue was up 51.9 per cent to $30.7 million for the second quarter while net property income rose 49.2 per cent to $28.7 million.
Income to be distributed per stapled security is 2.57 cents, versus 1.89 cents in Q2 2009.
For H1 2010, CDLHT’s income available for distribution was $45.7 million, up 28.6 per cent year on year while gross revenue rose 34.1 per cent to $57.3 million, on the back of improved hospitality performance across the portfolio and contribution from recently acquired hotels in Australia.
With Singapore’s tourism industry continuing to see strong growth momentum, average occupancy at its Singapore hotels jumped 13.1 percentage points to 88.5 per cent for Q2 2010 while average daily rate rose 23.6 per cent to $220.
Revenue per available room surged 45.4 per cent during the quarter to $195.
With additional attractions to open at the two integrated resorts and upcoming events such as the Formula One Singapore Grand Prix, CDLHT expects to benefit from the anticipated increase in demand for hotel rooms.
The trust owns five hotels in Singapore and Orchard Hotel Shopping Arcade. It also owns five hotels in Australia, which it acquired in February this year, and a hotel in New Zealand.
Vincent Yeo, CEO of M&C REIT Management, the manager of H-REIT, said: ‘CDLHT experienced a very robust second quarter with the growth momentum of our Singapore hotels’ performance accelerating compared to the first quarter.’
Having raised $200 million on July 1 through a private placement – which helped to reduce gearing to 18.6 per cent – and with its recently announced $1 billion multicurrency medium-term note programme (through a wholly owned subsidiary), CDLHT is in a better position ‘to capitalise on acquisition opportunities’. It is eyeing markets such as India, Japan as well as Singapore.
‘Studio M hotel (in Singapore) could be its top acquisition choice given the shorter-than-expected gestation of Studio M; with occupancy over 90 per cent and average room rate of $170,’ DMG Research suggested in a report yesterday.
DMG maintained a target price of $2.30, highlighting that acquisitions would likely boost longer-term DPU growth potential.
The counter closed six cents higher in trading yesterday at $2.
MLT – BT
MapletreeLog to buy 3 properties in Japan
MAPLETREE Logistics Trust has signed a binding memorandum of understanding (MOU) with Kabushiki Kaisha A-Max to acquire three properties in Japan, its manager Mapletree Logistics Trust Management (MLTM) said yesterday.
The properties are the Iwatsuki Logistics Centre, a distribution centre and office in Iwatsuki, with a gross floor area (GFA) of 30,000 sq m; the Iruma Logistics Centre, a distribution centre and office in Iruma, with GFA of 26,000 sq m, and Noda Logistics Centre, a distribution centre and office in Noda, with GFA of 36,000 sq m. All the locations are in Saitama Prefecture, which is Toyko’s northern neighbour.
The properties will be acquired for a total of 13 billion yen, (about S$200 million). The vendor, A-Max, is a logistics facilities development and management company.
The acquisition is the sixth announced by Mapletree since December last year, totalling $430 million.
With the completion of all of these acquisitions, MapletreeLog will have a portfolio value of about $3.3 billion.
MLTM said the latest acquisition will have significant benefits arising from attractive net property income (NPI) yield and distribution per unit accretion. The properties are also 100 per cent leased for eight to 10 years, providing stable rental income, and are in good locations.
‘Given the low interest rates in Japan, it is likely that this acquisition will be funded predominantly by debt,’ said MLTM. ‘Any proceeds from equity issuance will likely be applied towards other acquisitions or refinancing of other more expensive debt in the portfolio to maintain a gearing below 45 per cent.’
MLTM chief executive Richard Lai said: ‘Japan’s logistics market remains attractive to us because it has breadth and depth that is currently unmatched elsewhere in Asia. We will continue to expand our portfolio in Japan by selectively acquiring yield-accretive logistics assets of good quality and location. We also seek to enhance the quality of our income stream through addition of good-quality customers to our diversified customer base. We will continue to focus on such accretive third-party acquisitions as a key strategy to grow our portfolio, and in turn, the returns to our unit-holders.’
AIMSAMPIREIT – SGX
Announcement of Litigation against Nova Engineering & Logistics Pte. Ltd.
AIMS AMP Capital Industrial REIT Management Limited, as manager (the “Manager”) of AIMS AMP Capital Industrial REIT (the “Trust”), wishes to announce that the Trust has commenced legal proceedings in the High Court of Singapore (the “Suit”) against its former tenant, Nova Engineering & Logistics Pte. Ltd. (“NEL”) for NEL’s breaches of a lease agreement (the “Lease”) entered into with the Trust in relation to 7 Clementi Loop, Singapore 129811 (the “Property”).
The Trust took possession of the Property on 9 March 2010 after the Lease was terminated following NEL’s breaches of the Lease. Since the termination of the Lease, the Manager has re-leased the Property to new tenants. The Property is currently 86.0% occupied.
The Manager has been advised by its solicitors of the Trust’s strong merits in the Suit and will announce further updates as and when material developments concerning the Suit arise.
The Manager does not expect the Suit to have a material impact on the earnings of the Trust as the income from NEL under the Lease represented approximately 2.8% of the Trust’s rental income for the quarter ended 31 March 2010. The loss has been mitigated by the Manager’s leasing efforts to re-lease the Property as described above. A bank guarantee equivalent to two years’ rental income held as rental deposit in relation to the Lease has already been called.
Hospitality – DBSV
Book your rooms early!
• Record 5.5m visitors in 1H10, +22% yoy, 9% higher than previous peak in 2008
• Stronger 2H expected, demand to continue to outstrip room supply
• Hotel RevPAR up 20% YTD to S$174/night, further growth to be fueled by rate hikes
• BUY SIA, CDL HT, ART, Tiger Airways, UOL Ltd as proxies into the sector’s multi-year growth
Record 950k (+27%yoy) visitors in June’10. For 1H10, Singapore saw a total of 5.5m visitors, + 22% yoy, 9% over the previous peak in 2008. YTD visitation numbers implies that STB target of 11.5m-12.5m visitors in 2010 is attainable, as we have yet to pass the peak tourism seasons in Jun-Aug and the year-end holidays of Nov-Dec; historically, these account for 46-48% of full year visitations. Visitors are also staying longer with average stay of 4.2 days as of Jun’10.
Re-making Singapore is successful. Leveraging on the pull of the 2 IRs, we have seen visitors from major Asian markets rebounding strongly, with further potential from China and Australia as these have yet to reach their previous peak levels. Singapore has also broken into new markets with strong growth (>20%yoy) from visitors from HK, Philippines, Thailand & Vietnam.
F1 and YOG to fuel demand for rooms in 2H10, outstripping supply. With the upcoming events like Youth Olympic Games and Formula One coupled with the continuous ramping up of the 2 IRs, we expect room demand to remain tight in the coming months. Assuming average length of stay (“ALS”) of 4.1 days for 2010, we forecast total demand of between 10.5 – 11.4m room nights, versus total available room nights of 12.9m. We estimate that every 0.1 increase in ALS will boost industry occupancy by 2%.
Average RevPAR up 20% YTD. Average RevPAR is up 20% YTD with June’s RevPAR of S$191 (+40%yoy). With average occupancy at a high of 88%, further growth in RevPAR will be rate driven, which is more earnings enhancing. We maintain our view that average RevPAR in 2010 will rise 25% yoy to S$181.
Stock picks to ride on Singapore’s hospitality sector. Our picks to leverage on Singapore’s tourism sector secular growth story remains SIA, (BUY, TP $18.20), CDL HT (Under review, pending results), Ascott REIT (BUY, TP $1.44), UOL (BUY, TP $5.04), Tiger Airways (BUY, TP $2.25).