Fortune – BT
Fortune Reit Q1 DPU up 14.4%
HIGHER occupancies and rental rates, as well as the completion of asset enhancement works, drove first-quarter revenue for Fortune Reit up 10.4 per cent year on year.
Total revenue for the quarter ended March 31 grew from HK$152.4 million (S$29 million) to HK$168.2 million.
This lifted the distribution per unit (DPU) 14.4 per cent to 10.06 HK cents, up from 8.79 HK cents in Q1 last year.
Although the Reit expects 2009 to be challenging given the global financial and economic crisis, non-discretionary retail sales in Hong Kong still registered a growth for the first quarter and was less affected.
‘These results underscore the defensive nature of the Hong Kong suburban retail sector in general and Fortune Reit in particular,’ said chief operating officer Justina Chiu of ARA Asset Management (Singapore), which manages Fortune Reit.
‘The manager will continue to negotiate leases with tenants well in advance and will, at the same time, intensify marketing and promotion activities in order to assist tenants in keeping up their sales momentum,’ Ms Chiu added.
Fortune Reit, which has a portfolio of 11 retail malls in Hong Kong, saw higher occupancies and rental rates at City One Shatin Property, Ma On Shan Plaza and The Metropolis Mall.
Despite the financial crisis, occupancy remained solid at 95.5 per cent with passing rent up 3.6 per cent to HK$27.09 per square foot.
Completion of asset enhancement works at Waldorf Garden Property also contributed to revenue growth.
The Reit’s rental reversion remained healthy at 4.9 per cent being registered for renewals in the first quarter.
The quarter ended March 31 also saw a rise in net property income of 8 per cent from HK$114 million to HK$123.1 million.
Income available for distribution jumped 15.8 per cent to HK$82.8 million from HK$71.5 million.
Fortune Reit said it remains well positioned to weather the tightening of credit markets as one of the lowest geared Reits in the region at 26.6 per cent.
Its term loan of about HK$2.35 billion expires in June 2010 and borrowing costs for the period dropped 12.8 per cent year on year to HK$23.5 million.
Fortune Reit units closed trading six cents up at HK$3.11.