Month: July 2011
Suntec – CIMB
Preparing for asset rejuvenation
• Slightly above. 2Q11 DPU of 2.53 S cts was slightly above our and consensus estimates, forming 27% of our FY11 forecast. 1H11 DPU formed 52% of our full year estimate. The outperformance came mainly from lower-than-expected interest costs. Rentals and occupancy for Suntec City Mall continued to weaken though we believe that this could be in preparation for any potential asset enhancement initiatives to rejuvenate the mall. Likewise observations by other office landlords, leasing momentum appears to have slowed though occupancy within its office portfolio remains strong. We tweak our FY11-12 DPU estimates by -2% to +2% for lower interest expense in FY11-12 and a lower income support assumption in FY12. Our DDM-based target price is, however, unchanged at S$1.61 (discount rate: 8.1%). We maintain our NEUTRAL call. Potential re-rating catalysts are stronger than-expected rentals and AEIs at Suntec City Mall.
• Net property income (NPI) slipped 1% yoy due to weaker performance from Suntec City Mall. Distributable income, however, rose 22% yoy from contributions from Marina Bay Financial Centre Phase 1 (MBFC 1), which was offset by lower income support from One Raffles Quay. 2Q11 DPU was, however, flat yoy due to a larger unit base from a unit issuance to partly fund the acquisition of MBFC 1.
• Slower office leasing momentum. Suntec City’s office occupancy remained stable in 2Q11 at 99.5% with negative rental reversions appearing to have stabilised on a qoq basis. As the pace of office leasing momentum is likely to have slowed, achieved rents climbed only 1% (vs. 1Q11: 13%) from S$9.22 psf to S$9.28 psf, notwithstanding the minimal remaining office leases expiring in FY11. Management, however, notes continued demand for office space from tenants within the IT, oil & gas, legal and shipping industries.
• Preparing for rejuvenation of Suntec City Mall. Committed retail passing rents (S$10.16 psf, -1% qoq) drifted lower for the fifth quarter in 2Q11. Occupancy has also slipped by 0.8% pts to 97.1% though management has successfully renewed and lowered lease expiries to about 12% (1Q11: 19%) by retail portfolio (by NLA) in 2Q11. With a weakening portfolio, we anticipate plans for AEIs to rejuvenate the mall with any AEIs likely to be debt-funded.
MLT – BT
MapletreeLog Q2 net up 25%
MAPLETREE Logistics Trust has achieved net property income of $57 million for the second quarter ended June 30, up 24.6 per cent from a year ago. Distribution per unit (DPU) came in at 1.6 cents, against 1.5 cents a year earlier.
Gross revenue for the latest quarter rose 26.6 per cent to $65.8 million on the back of contributions from completed acquisitions in Singapore, Japan and South Korea. This was further boosted by positive rental reversion and higher occupancy of 98.9 per cent, said Mapletree Logistics Trust Management Ltd (MLTM), manager of the trust.
Said MLTM CEO Richard Lai: ‘Despite the continued uncertain economic environment experienced in Q2 2011, MapletreeLog’s portfolio has demonstrated its resilience and robustness, delivering a strong set of results. Organic growth was also achieved through proactive asset management initiative which saw the conversion of a property in Singapore from single-user asset to multi-tenanted building in Q1 2011. Overall, the portfolio experienced organic growth of 5.1 per cent in Q2 2011 against Q2 2010.’
Following the recent crises in Japan, MapletreeLog said it has commenced its repair efforts for the affected properties. Except for Sendai Centre, the other properties suffered limited damage, and minor repairs have been carried out. Total repair cost to be expensed as a result of the damage is estimated to be about $1 million, of which $0.5 million was recognised in Q2. The balance will be accounted for in Q3.
Sendai Centre has been declared structurally sound and repair works are underway to restore the chilled facility to full operational effectiveness.
As at June 30, MapletreeLog’s portfolio comprised 99 properties with a book value of approximately $3.6 billion.
MapletreeLog said it continues to pursue its growth strategy with inroads having been made into South Korea. Besides South Korea, it said it continues to see acquisition opportunities in Singapore, Japan, China and Malaysia. It will also broaden its investment horizon to new markets.
Suntec – BT
Suntec Reit DPU for Q2 edges up
Income available for distribution jumps 22.3% to $56.2m
SUNTEC Real Estate Investment Trust’s income available for distribution rose 22.3 per cent to $56.2 million for the second quarter ended June 30.
However, distribution per unit (DPU) for Q2 2011 came in only marginally higher at 2.532 cents as compared with the 2.528 cents recorded during the same period a year ago. This gives an annualised yield of 6.6 per cent based on yesterday’s closing price of $1.535.
Coupled with distributions in the first quarter of 2011, Suntec Reit’s H1 2011 DPU now stands at 4.92 cents.
ARA Trust Management (Suntec) Ltd, the manager of Suntec Reit, said yesterday that the gross revenue for the second quarter of $61.3 million came in 1.8 per cent lower year on year due to weaker office and retail revenues.
Gross revenue for H1 2011 stands at $122.3 million, down about 2 per cent year on year.
Correspondingly, Q2 2011 and H1 2011 net property income for the Reit came in 1.1 per cent and 1.7 per cent lower year on year at $46.9 million and $93.6 million respectively.
But overall committed occupancy remains stellar as at end June. The committed occupancy of Suntec City Office Towers stood at a high of 99.5 per cent while the Park Mall office maintained full occupancy take-up.
Similarly, amongst the Reit’s retail properties, committed occupancy stayed stable at 97.1 per cent for Suntec City Mall and 100 per cent for both Park Mall and Chijmes.
For jointly controlled properties, One Raffles Quay attained full occupancy status while MBFC Properties’ committed occupancy numbers came in at 97.4 per cent.
The overall committed occupancy for Suntec Reit’s office and retail portfolio stood at 99.1 per cent and 97.7 per cent respectively as at June 30.
Suntec Reit’s shares were last traded at $1.535.
First Reit – BT
HEALTHCARE real estate investment trust First Reit announced on Friday that its second-quarter distribution per unit (DPU) is 1.58 cents compared to 1.92 cents for the same time period a year ago.
After taking into account the effect of the rights issue made in December 2010, the second-quarter DPU of 1.58 cents this year is up from an adjusted DPU of 0.85 cents in the previous corresponding time period.
First Reit reported an annualised DPU of 6.37 cents, while its distribution yield stood at 7.8 per cent based on its closing price of 82 cents on July 20.
Distributable income for the second-quarter this year rose 86.5 per cent to S$9.89 million, up from S$5.30 million last year.
Gross revenue increased 75.3 per cent year-on-year to S$13.2 million helped by maiden contributions from two of its new hospitals acquired in December 2010.
Looking ahead, First Reit said it is in preliminary discussions with its sponsor, Lippo Karawaci, to acquire two of the latter's new hospitals in Indonesia.
First Reit also said its gain on divestment of the Adam Road property in the first quarter this year is about S$8.7 million, which will be distributed either wholly or partially to unitholders in the coming quarters.
Suntec – BT
Suntec Real Estate Investment Trust reported a 22.3 per cent increase in second-quarter distribution income of S$56.18 million, compared to S$45.93 million a year ago.
The distribution per unit for the quarter ended Jun 30 amounted to 2.53 Singapore cents, translating to an annualised distribution yield of 6.6 per cent.
Gross revenue for the quarter was S$61.3 million, marginally lower that last year by 1.8 per cent.
The gross retail revenue was S$31.9 million, 2.7 per cent lower than a year ago. This was mainly due to lower rental income achieved for Suntec City Mall.
The gross office revenue was S$29.4 million, 0.7 per cent lower than the previous corresponding time period.
Suntec REIT expects to exceed the forecast distribution per unit for FY2011.