K-REIT – BT

K-Reit Q3 DPU up 16%

K-REIT Asia yesterday posted a distribution per unit (DPU) of 1.96 cents for the third quarter – 16 per cent higher compared with a year ago.

The annualised DPU works out to 7.78 cents, generating a distribution yield of 7.7 per cent based on K-Reit’s closing unit price of $1.005 as at Sept 30.

The improvement in DPU came on the back of a 17.7 per cent rise in distributable income to unitholders to $26.7 million.

Powering the increase in distributable income was a surge in contributions from associated companies, including one which owns Marina Bay Financial Centre Towers 1 & 2 and Marina Bay Link Mall. K-Reit’s share of results of these companies reached $10.9 million, which is 5.6 times that of last year’s $1.9 million.

Higher share of profits from associated companies helped to make up for a 16.3 per cent drop in net property income to $14.7 million. The decrease was partly due to the divestment of Keppel Towers and GE Tower last year.

For the nine months ended Sept 30, K-Reit’s DPU was 5.68 cents, up 22.2 per cent year on year. On an annualised basis, its DPU came up to 7.59 cents.

Distributable income to unitholders rose 23.6 per cent to $77.2 million, driven largely by a higher share of profits from associated companies, as well as higher interest income. These helped to mitigate the impact of an 11.8 per cent fall in net property income to $43.9 million.

K-Reit’s aggregate leverage as at Sept 30 was 39.8 per cent, creeping up from 39.2 per cent in the previous quarter. It has no debt expiring next year while $100 million of debt will be due for refinancing in 2013.

K-Reit’s units gained three cents on the stock market yesterday to $1.03 before the company called for a trading halt in the afternoon, pending its announcement of an acquisition. The counter resumes trading today.