Fortune – BT
Fortune Reit Q2 distribution income dips
FORTUNE Real Estate Investment Trust (Reit) yesterday posted a net property income of HK$115.3 million (S$21.4 million) for the second quarter ended June 30. This is 0.3 per cent more than a year ago.
However, income available for distribution dipped 0.7 per cent to HK$78.9 million. Distribution per unit was 9.54 HK cents, slightly below the 9.72 HK cents for the same period last year.
The occupancy rate across Fortune Reit’s portfolio of 11 retail malls in Hong Kong slipped from 95.5 per cent as at March 31 to 92.1 per cent as at June 30. Offsetting weaker occupancies was an increase in the average passing rent, which was HK$27.60 psf as at June 30.
Fortune Reit said that its suburban malls have stood ‘reasonably well’ in the downturn because they ‘serve a captive population’ and cater to non-discretionary spending on necessities and services.
The Reit also benefited from higher valuations of its malls and reaped a revaluation gain of HK$281.3 million. Its portfolio was valued at HK$8.9 billion as at June 30 – 3.5 per cent higher than at Dec 31, 2008.
Fortune Reit’s gearing at the end of Q2 was 25.7 per cent, and it has more than HK$2.37 billion worth of borrowings coming due in a year or less. It said that its manager ARA Asset Management (Singapore) is in discussion with various banks to refinance a term loan due in June 2010.
For the first half ended June 30, Fortune Reit saw a 4.1 per cent year-on-year rise in net property income to HK$238.4 million. Income available for distribution gained 7.1 per cent to HK$161.7 million. H1 DPU was 19.60 HK cents, exceeding the 18.51 HK cents a year ago.
Unitholders will receive a distribution of 19.60 HK cents per unit on August 28, for the period Jan 1 to June 30.
On future plans, ARA Asset Management (Singapore) chief operating officer Justina Chiu said that the manager will focus on ‘retaining quality tenants’ and step up on marketing activities ‘to assist tenants in keeping up their sales momentum’.
Fortune Reit lost five HK cents yesterday to close at HK$4.07.