Month: January 2012
MIT – CIMB
On track
A dip in Business Park reversionary rents marred an otherwise stellar quarter after itsAugust acquisitions and equity fund-raising. We anticipate continued strength in the other segments which shouldoffsetthe stress in Business Parksgoing forward.
3Q/9M12 DPU meets consensus and our expectations, at 27%/ 78% of our estimates. We keep our estimates and DDM-based target price (disc rate: 8.6%). Maintain Outperform.
Biz Park reversions fell
3Q DPU shrank 9.2% yoy due to new units issued in Aug 11. Qoq growth was a positive 5.4%, led by improved portfolio occupancy (95.1%; +0.6% pt) and positive rental reversions for Flatted Factories (+26.8%), Stack-Up/Ramp-Up Buildings (27.5%) and Warehouses (31.5%) over the last renewal period, typically three years ago. In contrast, reversions in Business Parks fell 9.6%. New leases contracted here averaged S$3.92, 5.1% below renewal rates, hinting at more weakness to come.
Lengthening WALE
As at Dec 11, only 3.2% of its portfolio (by gross revenue) remained due for the rest of FY12. In future renewals, management intends to encourage tenants to take up longer leases of more than three years, to lengthen its portfolio weighted average lease to expiry (WALE) of 2.4 years (vs. REIT peers’ five years or so).
Two AEI projects to take off
Management announced AEI plans for Toa Payoh North Cluster 1 and Woodlands Central Cluster. While costs have not been finalised, capex should be S$30m-40m for each at a yield-on-cost of 9%. When completed, an additional 200,000sf (1% of portfolio GFA) will be created. Completion is anticipated by 2H12 with no major disruptions to revenue contributions. The AEI was catalysed by the expansion plans of existing tenants.
CRCT – BT
CRCT’s Q4 DPU rises 10%
Trust’s 9 income-producing malls ‘operating at close to full occupancy rate of 98.1%’
UNDETERRED by the uncertain global economy, China’s consumers are continuing to spend money – and CapitaRetail China Trust (CRCT) is reaping the benefits.
The real-estate investment trust (Reit) posted strong results for the fourth quarter ended Dec 31, 2011, with distribution per unit (DPU) rising 10 per cent year on year to 2.28 cents.
Total DPU for 2011 rose to 8.7 cents, a 4.1 per cent increase from 2010. The distribution yield is 7.6 per cent, based on CRCT’s closing price of $1.14 on Thursday.
Income available for distribution for the quarter exceeded the forecast by 9.1 per cent and stood at $15.7 million – a 21 per cent increase from the corresponding period a year ago.
For the year, income available for distribution was $57.2 million, 9.6 per cent higher than 2010’s $52.2 million.
Said Tony Tan, chief executive officer of CRCT’s manager CapitaRetail China Trust Management Ltd: ‘We are pleased to deliver a set of strong financial results with our nine income-producing malls operating at close to full occupancy rate of 98.1 per cent.’
CRCT saw its fourth consecutive quarter of double-digit growth in net property income, which rose 17 per cent to 113.5 million yuan (S$22.5 million), while for the full year, this was up 16 per cent at 443 million yuan.
But on a comparable portfolio basis that excludes CapitaMall Minzhongleyuan, which was acquired in June last year, net property income rose 12 per cent year on year.
Gross revenue for the quarter was 181.8 million yuan, an increase of 19 per cent over Q4 2010. In Singapore dollar terms, this was 3.8 per cent higher than forecast. This was mainly due to the contribution of 13.5 million yuan from CapitaMall Minzhongleyuan.
CRCT’s other malls contributed 14.8 million yuan, the increase of which was attributed to higher occupancies achieved in CapitaMall Qibao and CapitaMall Saihan, and higher rental growth in CapitaMall Xizhimen.
With China’s retail sales growing at a robust rate of 17 per cent in 2011, CRCT said that it is ‘confident’ about its prospects in China: ‘Increasing urbanisation, growing disposable income, and pro-consumption government policies will support the sustainable growth of the retail market in China.’
Mr Tan said that asset enhancement and acquisitions will be key drivers of growth in 2012, and added that a sustainable growth rate of 5 to 7 per cent over the next 20 to 30 years would be a ‘reasonable forecast’.
CRCT rose 4.5 cents, or 3.9 per cent, to close at $1.185 per unit yesterday.
PLife – BT
PLife Reit’s distributable income for Q4 up 3.2% at $14.9m
PARKWAY Life Real Estate Investment Trust’s distributable income for Q42011 increased 3.2 per cent to $14.9 million from a year ago, as a result of yield-accretive acquisitions made in Japan, higher rent from existing properties and savings from lower financing costs.
Accordingly, distributable income per unit (DPU) for Q42011 rose to 2.47 cents from 2.38 cents in the previous year, Parkway Trust Management Ltd, the Reit’s manager, said yesterday. Distribution payment is expected on Feb 29, 2012. Distributable income for FY2011 increased 9.2 per cent to $58.1 million, while DPU for the year grew to 9.60 cents from 8.79 cents.
Said Yong Yean Chau, chief executive officer of the manager: ‘Amid ongoing market uncertainty, we are glad to be able to consistently deliver DPU growth to our unitholders.
‘As we focused on consolidating our Japan business during the year, we remained steadfast in strengthening PLife Reit’s financial position and generating organic growth across the portfolio to sustain earnings stability.’
For Q42011, PLife registered gross revenue of $22.8 million, an increase of 6.3 per cent. This was primarily due to revenue contribution from the Japan nursing home acquired in January 2011 and appreciation of the Japanese yen. Revenue growth was further driven by higher rent from the Singapore hospital properties.
For FY2011, gross revenue increased 9.6 per cent to $87.8 million, mainly due to full year revenue contribution from the properties acquired in 2010 and 2011, and higher rent from existing properties.
MIT – BT
MIT Q3 distributable income up 29%
Gross revenue also increased 25% year-on-year to $65.7 million
MAPLETREE Industrial Trust (MIT), which was listed in October 2010, saw its distributable income rise 29.3 per cent to $35.2 million for its third quarter ended Dec 31, 2011, as compared to the previous year’s proforma results of $27.2 million.
The distributable income was also 28.1 per cent ahead of the forecast $27.5 million.
This led to MIT offering a distribution per unit (DPU) of 2.16 cents for the period – 14.9 per cent higher than the forecast of 1.88 cents. This translates to an annualised yield of 8.15 per cent as of yesterday’s closing price of $1.06.
Gross revenue also grew 25.3 per cent year-on-year to $65.7 million during Q3, due mainly to improved occupancy rates and positive rental revisions for assets such as flatted factories, stack-up/ramp-up buildings, and warehouses.
Net property income (NPI) for the period also climbed 24.6 per cent to $45.6 million from its proforma result of $36.6 million a year back.
Year-to-date, distributable income also rose 24.4 per cent to $95.9 million year-on-year, while NPI climbed to $125.3 million, up 20.5 per cent over the same period.
Average portfolio occupancy also remained healthy, rising to 95.1 per cent from 94.5 per cent in the previous quarter.
MIT’s manager has two asset enhancement initiatives planned.
One will involve the development of a new high- tech industrial building and an amenity block in Toa Payoh North 1 Cluster, while the other would comprise an extension wing, a multi-storey car park, and a canteen in the Woodlands Central Cluster.
The two initiatives are expected to add about 200,000 square feet of gross floor area to MIT’s portfolio, said Tham Kuo Wei, chief executive officer of MIT’s manager.
Yesterday, the counter rose half a cent or 0.5 per cent to $1.06.
FirstREIT – BT
First Reit Q4 DPU doubles on divestment
It’ll pay 1.93 cents per unit; gross revenue up 82%
FIRST Real Estate Investment Trust (First Reit) saw its distribution per unit (DPU) for the fourth quarter ended Dec 31, rise to 1.93 Singapore cents, up 121.8 per cent in the previous corresponding quarter.
This was helped by other gains relating to the distribution of a portion of the total gain on divestment of its Adam Road property of about $8.7 million, which was sold in Q1 last year to Fortis Global Healthcare.
The DPU is payable Feb 29.
The amount distributable rose 122.9 per cent to $12.12 million for the fourth quarter. Meanwhile, gross revenue rose 82 per cent to $13.93 million while net property income also rose 82.2 per cent to $13.77 million.
Results were lifted partly by maiden contributions from its three new properties: Mochtar Riady Comprehensive Cancer Centre and Siloam Hospitals Lippo Cikarang in Indonesia, and South Korea’s Sarang Hospital.
On a full-year basis, the Trust posted a DPU of 7.01 Singapore cents, as compared to 6.63 cents a year ago. Due to the effect of the rights issue and acquisitions made in Dec 2010, full-year 2011 DPU is not comparable to 2010 DPU.
For the full fiscal year, the amount distributable gained 105.8 per cent to $43.93 million.
Gross revenue rose 78.4 per cent to $54.01 million while net property income also rose 78.9 per cent to $53.44 million for the full year.
Earnings per unit were 3.39 cents for 4QFY11 and 8.15 cents for FY11.
As at Dec 28 last year, the total value of First Reit’s investment properties rose from $612.8 million to $618 million, following the acquisition of Sarang Hospital and the divestment of the Adam Road property.
Going forward, manager of First Reit, Bowsprit Capital Corporation, said it expects Indonesia to remain a key focus, and it sees strong potential as Indonesia’s consumption growth continues to grow, which invariably will increase the demand for quality healthcare services.
‘We have been in discussions with our sponsor PT Lippo Karawaci Tbk to acquire some of its upcoming properties on which we have a right of first refusal,’ said Bowsprit’s CEO Ronnie Tan.
On the Singapore front, Bowsprit said the nation’s ageing population and current ‘bed shortage’ will continue to drive the demand for more nursing homes and community hospitals.
As part of its asset enhancement strategy for its properties, the Trust is adding a new five-storey extension block at The Lentor Residence, which is slated for completion in the second half of 2012.
First Reit shares closed at 77 cents yesterday, up half a cent.