Author: tfwee
Suntec – SGX
Suntec REIT Distribution Income For 3QFY07 Up 22.9% To S$30.0 million Year-on-Year
Distribution Per Unit Up 11.9% To 2.100 Cents
Singapore, 30 July 2007 – ARA Trust Management (Suntec) Limited (“ARA Suntec”),
Manager of Suntec Real Estate Investment Trust (“Suntec REIT”), is pleased to announce a distribution income of S$30.0 million for the period 1 April 2007 to 30 June 2007 (3QFY07), 22.9% higher than the S$24.4 million reported for the corresponding period in 2006 (3QFY06). The distribution per unit of 2.100 cents for 3QFY07 was 11.9% higher than in 3QFY06.
Commenting on Suntec REIT’s performance, Mr. Yeo See Kiat, Chief Executive Officer of
ARA Suntec, said, “I’m pleased to report that Suntec REIT has achieved a very good growth for the office portfolio in this quarter. In addition, Suntec City Mall has also reached a new high in its committed average passing rent, to S$10.23 p.s.f. per month as at 30 June 2007.”
Office portfolio continues to enjoy strong rental growth.
Suntec REIT’s office portfolio continued to strengthen significantly. Suntec office leases achieved strong renewal and replacement growth rates for the quarter, with leases secured at rates of between S$9.00 – S$10.50 p.s.f. per month. Park Mall office leases also achieved strong renewal and replacement growth in 3QFY07. The committed office occupancy at Suntec City and Park Mall increased to 99.4% and 98.5% respectively as at 30 June 2007.
Committed average passing rent at Suntec City Mall achieved post-IPO high.
The average retail passing rent at Suntec City Mall achieved a high of S$10.23 p.s.f. per month as at 30 June 2007, underpinned by strong renewals and new leases from the asset enhancement projects, namely MY.PLAYGround and the Fashion zone at Galleria. Average passing rents at Park Mall and Chijmes were S$6.49 p.s.f. per month and S$10.38 p.s.f. per month respectively as at 30 June 2007. Suntec REIT’s other income revenue from A&P, pushcarts and kiosks for the nine months ended FY07 grew 14.8% year-on-year compared to the same period in FY06.
Asset enhancement updates. Suntec City Mall’s new Fashion zone at Galleria achieved an average rent of S$24 p.s.f. per month compared with S$12.27 p.s.f. per month previously, with a committed occupancy of 73% to date. This is expected to strengthen further in the next quarter.
Summary of Suntec REIT Results for 3QFY07
For the period 1 April 2007 to 30 June 2007, Suntec REIT recorded gross revenue of S$46.7 million and distribution income of S$30.0 million, which was 6.3% and 22.9% higher than 3QFY06 respectively. The distribution per unit amounted to 2.100 cents, which was 11.9% higher than 3QFY06.
Source : SGX
CMT – BT
CMT’s Q2 net income up 27.6% to $48.8m
The Reit’s strong Q2 showing is due to good revenue growth
CAPITAMALL Trust (CMT) yesterday said that distributable income for the second quarter ended June 30, 2007, rose 27.6 per cent year-on-year to $48.8 million, boosted by higher rents and earnings from its newly acquired stake in Raffles City.
Distributable income for the same three months in 2006 came to $38.3 million. CMT bought 40 per cent of the Raffles City retail and office complex on Sept 1 last year.
Distribution per unit (DPU) increased by 12.6 per cent to 3.12 cents, from 2.77 cents for 2006.
For the first six months of 2007, CMT recorded a 26.2 per cent jump in distributable income to $95.7 million while DPU rose 11.5 per cent to 6.12 cents.
CMT, which is the largest real estate investment trust (Reit) in Singapore, has an asset size of about $5.7 billion. The trust said that it owns 13 per cent of the private retail stock by net lettable area in Singapore.
The trust’s strong second-quarter showing was underpinned by good revenue growth as most of its malls performed better than expected in the second quarter, it said.
Net property income for the three months rose 36.2 per cent to $67.1 million, mainly due to revenue of some $16.3 million from CMT’s Raffles City stake. Another $6.4 million increase in revenue came from other malls mostly due to new and renewed leases as well as higher revenue from IMM Building which benefited from asset enhancement works.
‘We remain confident of the acquisition opportunities in Singapore and have raised our target asset size to $8 billion by 2010,’ said Hsuan Owyang, chairman of CMT’s manager.
In the second quarter, the trust said it will pay some $290.3 million for three local suburban shopping malls here.
The Reit may also buy 50 per cent of Ion Orchard, a mall its parent company CapitaLand is developing with Hong Kong’s Sun Hung Kai Properties along the Orchard Road shopping belt.
CapitaLand’s stake in the mall, which is expected to be completed by end-2008, is worth more than $1 billion, Pua Seck Guan, chief executive of CapitaLand’s retail arm, told reporters yesterday.
The trust also plans to spend $169 million upgrading its malls this year, and another $127 million in 2008.
Amid a broad market retreat, CMT’s shares fell 12 cents to close at $3.64 yesterday. The stock has climbed 25.1 per cent since the start of the year.
MapleTree – DBS
Acquisitions to drive growth
Comment on Results
MLT reported 2Q07 results in line with our expectations. Gross revenue increased 83% y-o-y to S$34.1m, mainly due to the 30 new properties acquired during the year. Cost efficiencies and economies of scale have also resulted in higher net property income margin. Net distributable income grew 84% y-o-y to S$17.7m.
DPU increased by 33.6% y-o-y to 1.59 cents.
Outlook
To date, MLT has a portfolio of 67 properties with a total value of S$2.2bn(including properties pending completion). Moving forward, MLT is expecting to see more growth coming from outside Singapore. With a ready development pipeline from the sponsor in Vietnam, China and Malaysia, MLT is set to expand its footprint in Asia. In the medium to long term, MLT would also be exploring emerging markets such as South Korea, India, Thailand and Taiwan.
Recommendation
With nine announced acquisitions pending completion (worth around S$166m), there is still an acquisition target balance of around S$200m to S$300m. MLT is on track to achieve its target acquisition pipeline of S$1 bn to reach S$2.4bn by year-end.
Maintain Buy recommendation and target price of S$1.46 (based on DCF Valuation).
MapleTree, MMP – BT
Mapletree Log, Macquarie MEAG Reit post better income
ANOTHER two real estate investment trusts have reported better performances.
For Mapletree Logistics Trust (MLT), gross revenue for Q2 2007 was $34.1 million, up 82.6 per cent year-on-year.
MLT said that this was mainly due to contributions from 30 new properties acquired during the year.
Compared to a book value of $1 billion a year ago, its portfolio of properties has since doubled to reach $2.1 billion as at 30 June.
Net property income for the quarter was $30 million, up 85.9 per cent, while distributable income attributable to unitholders was $17.7 million, up 83.6 per cent.
Distribution per unit (DPU) for the quarter of 1.59 cents was 33.6 per cent higher year-on-year and 7.4 per cent higher than the previous quarter.
Reiterating MLT’s ‘growth by acquisitions’ strategy, Chua Tiow Chye, CEO of Reit manager Mapletree Logistics Trust Management Ltd (MLTML) said: ‘For the current year-to-date, we have completed $654 million of acquisitions and have another $166 million of acquisitions that have been announced but are pending completion. This means we have achieved 82 per cent of our $1 billion target for 2007.’
Mr Chua also said the MLT’s funding structure will continue to be optimised.
As at June 30, MLT’s leverage ratio was 54 per cent compared to 39 per cent as at March 31, 2007.
At the end of Q2 2007, 55 per cent of MLT’s total borrowings of $1.182 billion were hedged, he added.
In January, MLT raised $349 million through a fund-raising exercise, offering 296.8 million new units. MLTML deputy CEO and CFO Richard Lai said it was ‘exploring various options of going to the markets for fund raising’ for future acquisitions. MLT expects to have a portfolio worth $5 billion by 2010.
About 20 per cent of its future pipeline will come from sponsor Mapletree Investments which is developing projects in Vietnam, China and Malaysia.
MLT’s share price closed at $1.33 per unit, down 3 cents from the previous day.
Separately, Macquarie MEAG Prime Real Estate Investment Trust (MMP Reit) reported yesterday that gross revenue for Q2 2007 increased 5.5 per cent year-on-year to $23.6 million, due mainly to higher-than-expected rents achieved for retail space in the basement of Wisma Atria, as well as for office space.
Contributions from six newly acquired properties in Tokyo were also booked for the first time.
Net property income was up 3.5 per cent at $17.9 million while distributable income was $14.3 million, up 4.7.
The DPU of 1.50 cents for the quarter was 4.2 per cent higher compared to the 1.44 cents achieved for the previous corresponding period.
MMP Reit share price ended the trading day at $1.25 unchanged.
MI-REIT – SGX
MACARTHURCOOK INDUSTRIAL REIT’s maiden quarter DPU in line with forecast
Financial Highlights
– 1QFY2008 distribution per unit (“DPU”) of 1.52 cents for first quarter
– Annualised DPU of 7.58 cents is 3.0% higher than forecast
– Net income of S$3.2 million is 3.9% above forecast
Singapore, 26 July 2007 – The Board of Directors of MacarthurCook Investment Managers (Asia) Limited (“the Manager”), the Manager of MacarthurCook Industrial REIT (“MI-REIT”), are pleased to announce a DPU of 1.52 cents per unit for the period from the listing date of 19 April 2007 to 30 June 2007 (“1QFY2008”). The annualised DPU of 7.58 cents is 3.0% above the 7.41 cents forecast1 for FY2008, as stated in the MI-REIT prospectus dated 12 April 2007.
The total income available for distribution to unitholders of S$3.9 million exceeded the forecast by S$0.11 million or 2.9%, after the inclusion of S$7.12 million in non-tax deductible and non-taxable items2. A key reason for the positive variance in distributable income against forecast was the S$0.12 million higher than forecast net income of S$3.2 million, due to:
- Property expenses of S$0.91 million being 48.6% lower than forecast, offsetting the one time, non-recurring variance in gross revenue of S$0.92 million3, and resulting in net property income (“NPI”) of S$4.70 million. The variation of 14.1% and 48.6% for gross revenue and property expenses respectively, is due to a number of tenants paying their expenses directly during the quarter whilst our payment procedures are being formalised.
- Non-property expenses of S$1.49 being 10.9% lower than forecast, due mainly to a smaller loss on re-measurement of financial derivatives and lower borrowing costs. Borrowing costs were 6.5% lower than forecast due primarily to actual interest rates
being lower than those used in the calculation of forecasts.
Mr Chris Calvert, Chief Executive Officer of the Manager said: “We are pleased that MIREIT’s distributable income is in line with our forecasts and attains our goal of providing unitholders with a stable, growing income stream. Income stability and growth is supported by strong fundamentals, such as our quality industrial assets, quality tenants and long lease maturity profile.”
Disciplined Acquisition Growth Strategy
The Manager will also continue to drive the growth of MI-REIT via its acquisition growth strategy of acquiring yield-accretive and high-quality industrial properties.
Mr Calvert said: “Acquisition growth is an integral driver of our business that will provide both growth and diversification benefits to our portfolio. We have a target to acquire up to S$500 million in property assets over the next 12 months and are working extremely hard to achieve this goal.
Our strategic alliance with United Engineers Development Pte Ltd (“UEL”) and our strong relationships with agents across Asia have created numerous potential investment opportunities. We also expect our regional footprint to grow as existing tenants in Singapore expand their operations throughout the region.”
Mr Calvert added: “Our disciplined investment approach to asset selection and requirement for all acquisitions to undergo a thorough due diligence process ensures that we will acquire only quality income-producing assets that strengthen the portfolio and provide growth and diversification benefits.”
The Manager expects that the majority of acquisitions over the next 12-18 months will be made in Singapore. With its Pan-Asian mandate however, MI-REIT will also look to acquire industrial property in selected countries throughout Asia, such as Japan, Hong Kong and Malaysia.
Increased Financial Flexibility to support growth
MI-REIT recently obtained a corporate Baa3 ‘stable’ rating outlook by Moody’s Investors Service (“Moodys”). The credit rating enables MI-REIT to increase its gearing capability to up to a maximum of 60% from its current aggregate gearing level of 8.6%. With available debt capacity of approximately S$200 million to fund acquisitions, MI-REIT has greater operational flexibility to execute its acquisition growth strategy. The Manager expects to maintain a long term target gearing ratio of between 40%-45% to maintain the appropriate risk profile of MI-REIT. The Manager also successfully negotiated with its bank lending syndicate to increase its facility from S$128.8 million to S$220.8 million.
Outlook for FY2007/08
As a result of the continued strong economic growth underpinned by strong growth in the construction and manufacturing sectors, the Urban Redevelopment Authority recorded the highest quarter to quarter increase for the industrial property market since the up-trend in early 2004. Prices of overall industrial space rose 4.0% and rents increased by 4.5% in the first quarter of the year.
Growth in the knowledge-based industries and the tight office supply situation has also contributed to the climb in rentals of high tech industrial space, which are expected to rise to as much as 10% for 2007. The demand for industrial space in the countries in which MIREIT may invest is also expected to expand on the back of firm GDP growth.
Given the positive outlook and barring any unforeseen circumstances, the Manager expects to deliver an annualised distribution per unit of 7.58 cents for the current financial year that is in line with forecasts.
1 No comparisons against a corresponding period in the previous year can be made as no pro forma financials are available. SGX-ST had granted MI-REIT a waiver from the requirement to prepare historical pro forma statements of total return, cash flow statements and balance sheets for the purpose of its initial public offering.
2 These include the net change in fair value of investment properties and other non-tax deductible and nontaxable items which will not affect the DPU as MI-REIT’s distributions are based on taxable income.
3 This variance was mainly due to monies being held back for a period from settlement on one of the properties, resulting in subsequent reduction in rent. Pro-rated monies were held back whilst the vendor awaited receipt of a Certificate of Statutory Completion on construction of a new building.
Source : SGX