K-REIT – BT

K-Reit Asia's post-rights DPU doubles in Q1

Surge in property revenue from new office investments

K-REIT Asia yesterday posted a distribution per unit (DPU) of 1.90 cents for the first quarter based on an enlarged post-rights share base – compared to 0.96 cents a year ago,

The annualised DPU works out to 7.64 cents, generating a distribution yield of 7.9 per cent based on K-Reit's closing unit price of $0.965 as at March 30.

The counter ended trading yesterday at $0.94, down 0.53 per cent or 0.5 cents.

The improvement in DPU came on the back of a two-fold rise in distributable income to unitholders to $48.54 million.

Powering the increase in distributable income was a surge in property contributions from associated companies and new acquisitions including Prudential Tower, 8 Chifley Square in Sydney and Ocean Financial Centre (OFC).

Share of results of associates increased 82.6 per cent to $11.2 million as a result of higher contribution from its interest in BFC Development and One Raffles Quay.

Property income for the office Reit was $36.6 million in Q1, up $17.9 million or 96.0 per cent from a year earlier. This is mainly due to the $17.3 million contribution from the OFC interest, and the higher property income from Prudential Tower as well as the interest in 275 George Street in Brisbane.

These higher income streams translated to a 90.8 per cent increase in net property income to $28.5 million.

K-Reit's Singapore portfolio occupancy of 96.3 per cent outperformed that of the core central business district of 90.7 per cent.

The Reit has about 1.9 per cent of net lettable area due for rent review and renewal in 2012. However, it has given an assurance that that with a portfolio-weighted average lease expiry of 6.4 years and healthy capital levels, it is in "good stead" to weather the economic slowdown in 2012.

K-Reit's aggregate leverage level as at March 31 is 41.8 per cent. It has initiated negotiations to refinance $535 million worth of borrowings due at the end of 2012.