Author: tfwee
FCOT – BT
SINGAPORE – Singapore’s Frasers Commercial Trust said on Thursday it may consider a rights issue as an option to refinance its debt, however the company said no firm decision has been taken on the plan.
a-iTrust – BT
a-iTrust posts 25% rise in Q4 DPU
ASCENDAS India Trust (a-iTrust) said yesterday that distributable income for its fourth quarter ended March 31 rose 26 per cent to $15.6 million from a year back.
Distribution per unit (DPU) for the quarter rose 25 per cent to 2.05 cents, bringing the full year’s DPU to 7.54 cents.
The 24 per cent rise in full-year DPU was ‘driven by strong performance of the assets’ and exceeded the DPU forecast of 6.85 cents stated in its 2007 listing prospectus. Distribution is semi-annual, so the DPU for Q3 and Q4, which amounts to 4.07 cents, will be payable on May 26.
Total property income for the fourth quarter rose 13 per cent to $30.8 million from the year-ago Q4, while net property income grew 8 per cent to $17.4 million. For the full year, total property income grew 15 per cent to $118.1 million, from $102.7 million in the previous year, while net property income rose 9 per cent to $66.2 million.
Net asset value attributable to unitholders was 89 cents per unit as at March 31.
Jonathan Yap, chief executive of the trust’s manager, said: ‘Our results reflect the strong cash generation of our assets and robust demand for space in our properties.’
a-iTrust has a portfolio of 4.8 million square feet of completed space in Bangalore, Chennai and Hyderabad. The occupancy rate for its portfolio was 98 per cent at the close of the fourth quarter, above market occupancy rates of 72 per cent to 87 per cent in the three cities, the trust said.
During the year, leases for 24 per cent of the portfolio’s space expired, out of which 89 per cent was renewed. The trust manager said that it intends to ‘renew or replace expiring leases in advance’. About 13 per cent of space is due for renewal in the next year.
‘Apart from organic growth, we are developing buildings on land owned by the trust, to give us new income stream,’ said Mr Yap.
These include plans to develop 1.5 million square feet of space in international tech parks in Bangalore and Chennai. The trust also owns 2.7 million sq ft of space which is largely within an approved special economic zone in the Bangalore tech park, which can potentially be further developed.
As at March 31, a-iTrust’s total borrowings of $79 million reflected a gearing level of 9 per cent.
The trust’s shares closed 0.5 cent down at 50.5 cents yesterday.
Suntec – BT
Suntec Reit secures $825m refinancing
Interest margin at below 3.75%; Q1 distributable income up 23% at $46.4m
SUNTEC Reit has secured an $825 million loan facility. And with this fresh loan, the office and retail trust has no further refinancing needs until 2011.
The new facility will be used to refinance Suntec Reit’s existing debt under its medium-term notes programme and $700 million of commercial mortgage backed securities maturing this year.
It comprises a $725 million three-year loan and a $100 million seven-year fixed-rate loan from a panel of seven banks. The blended all-in interest margin works out to less than 3.75 per cent, Suntec Reit said yesterday.
The loan facility will be secured by Suntec City Mall and parts of the trust’s portfolio in Suntec City Office Towers. The loans were granted by the three local banks – DBS Bank, OCBC Bank and United Overseas Bank – and four foreign banks.
The new facility means that Suntec Reit has refinanced $1.7 billion of borrowings in the past two years, said Yeo See Kiat, chief executive of the trust’s manager. Suntec Reit refinanced $870 million of loans in 2008.
‘Amid the tight liquidity in this global economic and financial crisis, this club loan of $825 million clearly demonstrates Suntec Reit’s strong credit standing,’ said Mr Yeo, adding that the trust is now in a good position to meet the challenges ahead.
Yesterday, Suntec Reit also reported that distributable income for Q1 2009 rose 23 per cent to $46.4 million, from $37.6 million a year ago, on higher office and retail rents from its properties.
On the back of this, distribution per unit (DPU) rose 15.9 per cent to 2.918 cents from 2.5185 cents in 2008.
Net property income for the quarter rose 15 per cent to $49.2 million, from $42.6 million a year ago.
Gross office revenue for the three months ended March 31 rose 32 per cent to $30.2 million. At end-March, committed overall occupancy for the office portfolio stood at 97.4 per cent, with renewal and replacement leases at Suntec City secured at an average of close to $10 per square foot per month (psf pm) for the quarter.
Likewise, committed retail passing rents remained strong. The committed retail passing rent at Suntec City Mall stood at $11.05 psf pm, while rents at Park Mall and Chijmes were $7.63 psf pm and $10.76 psf pm. The committed overall occupancy for the retail portfolio was 98.8 per cent.
Suntec Reit owns Suntec City Mall and office units in Suntec Towers One, Two and Three and the whole of Suntec Towers Four and Five. Its property portfolio also comprises Park Mall, Chijmes and a one-third interest in One Raffles Quay.
The trust’s units lost three cents, or 4.3 per cent, to close at 66 cents yesterday.
Suntec – Nomura
First look
After market close in Singapore today, Suntec REIT announced its 1Q09 results and that it has secured refinancing for all S$825mn of debts maturing this year. 1Q09 results beat our and consensus expectations, and we think management’s ability to achieve steady rentals in 1Q09 while keeping vacancy low is commendable in the current market. While the cost of refinancing appears to be above our expectation, we expect the share price to react positively to the news.
Strong 1Q; refinancing secured
Cambridge – CIMB
Stable for now
• Results in line. 1Q09 results are in line with consensus and our expectations. DPU of 1.29cts forms 27% of our forecast for FY09. Gross revenue of S$18.4m was flat qoq, but net property income of S$16.1m was up 6% qoq as CREIT benefited from land-rent and property-tax rebates. Portfolio occupancy was 99.2% as at 31 Mar 09, down marginally from 99.5% in Dec 08.
• Covenants on debt facility may strain cash flow. Management clarified that its weighted average effective interest rate is 5.9% p.a., and not 7.2% as reported in an SGX release on 18 Feb 09. Management earlier assumed that the swap cost of S$18.35m would be expensed over the tenure of the new debt facility. It will now recognise the change in fair value and expense off S$18.35m. Although the need to repay this S$18.35m over the tenure of the CIT facility will not affect distribution, cash flow may be strained. Management is exploring options to increase cash proceeds which could include the divestment of non-core assets, scrip dividends and a rights issue, among others.
• Adequate buffer before cash lock-up is triggered. Management revealed more debt covenants, including a loan to value (LTV) ratio of 55% and a debt service cover ratio of 2.2x, and lenders’ right to lock up cash proceeds if the LTV reaches 50% or if the debt service cover ratio reaches 2.5x. The revelation of the second covenant is worrying, implying that lenders could technically halt distribution to unitholders. Nonetheless, we take comfort in the relative stability in the medium term as asset values will need to decline by about 25% before the 50% LTV is breached, in our estimation.
• Maintain Outperform with lower target price of S$0.47, still based on DDM valuation (discount 9.6%). We lower our occupancy assumption to 95% from 98% to reflect possibly increased cases of tenant default. Our 2009-11 DPU forecasts fall by 9-12%. Nonetheless, we expect CREIT’s performance to be stable, with only 6.1% of rental income expiring between now and 2012, 16 months of security deposits on average, and 5.4 years of weighted average remaining lease term (by income).