Author: tfwee
ART – BT
SINGAPORE – Ascott Residence Trust recorded a 24 per cent drop in its distribution per unit for Q1 2009 year-on-year, from 2.33 cents to 1.77 cents.
Gross profit for the quarter fell 16 per cent compared to the same period from a year ago, from $23.6 million to $19.9 million.
The trust attributed the lower profit to the economic downturn which had affected the Asian hospitality industry.
K-Reit – BT
Keppel Land’s listed trust K-Reit Asia reported on Tuesday a 37.3 per cent surge in Q1 distributable income as it saw higher rents from new and renewed leases.
Distributable income for the three months ended March 31, 2009 rose to $15.7 million, from $11.4 million in Q1 2008.
But distribution per unit fell to 2.38 cents, from 4.60 cents, on the back of new shares issued during the trust’s May 2008 rights issue.
Given the uncertainties ahead, K-Reit’s manager said it will place emphasis on tenant retention and seek to improve operational and cost efficiencies, the trust said. K-Reit Asia will also make selective asset acquisitions should opportunities arise, it added.
CMT – CIMB
Signs of decline
• DPU in line, gross turnover down. 1Q09 results were in line with Street and our expectations. Total distributable income of S$62.6m excludes S$5.9m of revenue which has been retained. 1Q09 DPU of 1.97cts fell 43.4% yoy to form 24% of our forecast for FY09. The yoy decline was due to more units as a result of its rights issue. Gross revenue of S$134.5m was up 11.1% yoy on new contributions from Atrium@Orchard and the completion of asset enhancement initiatives in various malls. Qoq, gross revenue was flat due to a 3.4% qoq decline in gross turnover (all categories affected) as well as a slowdown in reversions.
• Reversion rates slowing. While portfolio occupancy had remained stable at 99.5%, reversions showed the first signs of slowing. Based on 125 leases renewed in 1Q09, average rentals grew 1.3% over preceding rates (typically committed three years ago). This represents an annual growth of 0.4%, below the 6-year average annual growth of 3.2%.
• Asset enhancement for JEC and Atrium still under review. Plans for the asset enhancement of Jurong Entertainment Centre and Atrium@Orchard are still under review. Subject to market conditions and regulatory approvals, work could start at the end of 2009 for JEC and end of 2010 for Atrium.
• No changes to our forecasts; downside risks remain. For the rest of 2009, we expect CMT’s portfolio occupancy to stay rather stable, anchored by its well-located suburban malls. However, with leases accounting for more than 50% of its rental revenue expiring over 2009-10 (21.5% in 2009 and 36.4% in 2010) and possibly worsening unemployment and retail sales, downside risks for rents remain. Maintain Underperform and target price S$0.87, still based on DDM valuation (discount 9.7%).
MI-REIT – BT
MI-Reit meets terms for loan extension
MACARTHURCOOK Industrial Reit (MI-Reit) yesterday said that it has satisfied all conditions to get a 60-day extension for its $220.8 million loan facility, which was originally due to expire today.
With the extension, the loans will instead be due on June 16 this year. MI-Reit’s manager remains in advanced negotiations with its lenders in relation to the refinance of the facility, the Reit said.
MI-Reit first said on March 31 that its lenders, National Australia Bank and Commonwealth Bank of Australia, had granted it a 60-day extension for the $220.8 million loan facility. But the extension for the property trust was subject to documentation and satisfaction of certain conditions, which have now been satisfied, MI-Reit said.
On April 1, Moody’s Investors Service downgraded MI-Reit’s corporate family rating from B1 to B2, and added that it was continuing its review of the rating for possible further downgrade. The downgrade reflected the existence of heightened liquidity pressure, given that the company had not yet secured definitive long-term refinancing for its loan originally due on April 18, 2009, Moody’s analyst Kathleen Lee said then.
As at Dec 31, 2008, MI-Reit had $225 million repayable within a year and its gearing ratio stood at 39.7 per cent. The trust lost half a cent to close at 26.5 cents yesterday.
AREIT – BT
A-Reit full-year DPU rises 7.4%
ASCENDAS Real Estate Investment Trust (A-Reit) yesterday reported a distribution per unit (DPU) of 3.23 cents for its fourth quarter ended March 31. This raised full-year DPU to 15.18 cents, a rise of 7.4 per cent on the back of sturdy growth in rental and occupancy rates.
The Q4 DPU of 3.23 cents was 12.5 per cent lower than the year-ago DPU of 3.69 cents. A-Reit said this was because of dilution by new units and the payment of performance fees in cash for the year. Otherwise, Q4 DPU would have been 3.8 cents, a rise of 3 per cent.
Full-year net property income (NPI) grew 21.8 per cent to $296.6 million, with organic growth – rentals and occupancy rate growth – contributing 39.3 per cent of the NPI growth. The rest of NPI growth was derived from investment and development projects completed over the course of the year.
A healthy portfolio occupancy of 97.8 per cent was achieved while occupancy rate for multi-tenanted properties was 95.3 per cent as at March 31, thanks to active leasing efforts by the property manager. Positive rental reversion in renewal rental rates was seen across the portfolio.
For the year, A-Reit completed three development projects at a total development cost of $178.2 million and made two acquisitions totalling $271.8 million.
A-Reit recorded a revaluation loss of 2.5 per cent to about $4.43 billion as at March 31 following a portfolio revaluation.
The NPI outlook for fiscal 2009 is expected to be about the level achieved for fiscal 2008, the trust manager said.
But with the expected higher cost of borrowing, distribution income may be lower and will also spread over a larger unit base due to recent fund-raising exercises.
A-Reit expects to keep a payout ratio of 100 per cent of distributable income, a policy it has maintained since listing, Tan Ser Ping, CEO of the trust manager, told reporters and analysts at a briefing last evening.
Explaining the payment of performance fee in cash, Mr Tan said: ‘This is to minimise the gap between the earnings per unit (EPU) and DPU to avoid paying distribution out of capital.’
Some 14.1 per cent of portfolio gross revenue is due for renewal over the next 12 months.
The current passing rentals for space due for renewal in some sub-sectors of the portfolio are lower than the spot rates and Mr Tan said he expects this weakness to persist for a while.
A-Reit has a total development pipeline costing $158.7 million. Some $132.7 million of investment is committed, of which $76.3 million has been spent and another $56.4 million of development cost require funding.
‘Over time, there may be some distressed assets opportunities that may come along but our focus is on high-quality tenants and properties that have good potential in terms of upside,’ Mr Tan said.
To strengthen its balance sheet and fund committed development projects, A-Reit raised $408 million in January and February through a private placement and a preferential offer. As at March 31, its aggregate leverage was 35.5 per cent, down from 38.2 per cent a year ago.
It also secured new loans of $200 million and incorporated a $1 billion medium term note (MTN) programme. Some 90 per cent of interest rate exposure is hedged into fixed rate for the next 3.4 years with weighted average all-in funding cost of 3.67 per cent.
Its interest cover ratio as at March 31 was 4.6 times, down from 5.1 times a year ago.
A-Reit’s $300 million of commercial mortgage backed securities that will mature this year will be repaid by existing credit facilities while its $246 million revolving credit facilities due this year will be partially paid down and partially refinanced.