Author: tfwee
MMP – SGX
MMP REIT REPORTS DPU OF 1.50 CENTS FOR 2Q 2007
HIGHLIGHTS
• 2Q 2007 DPU of 1.50 cents exceeds 2Q 2006 DPU of 1.44 cents by 4.2%
• Significant NAV uplift of 9.8% from revaluation of Singapore properties
• Affirmed Moody’s corporate rating of Baa1 reflects high quality of assets and provides operational and acquisition funding flexibility
SINGAPORE, 26 July 2007 – Macquarie Pacific Star, the Manager of MMP REIT – the S-Reit with the biggest presence in Orchard Road – today announced MMP REIT’s second quarter (2Q 2007) Distribution Per Unit (DPU) of 1.50 cents. Meanwhile, a revaluation of its prime Orchard Road properties raised Net Asset Value (NAV) by 9.8%.
The DPU of 1.50 cents for the period 1 April to 30 June 2007 is 4.2% higher compared to the 1.44 cents achieved for the previous corresponding period. It also beats MMP REIT’s previous record of 1.47 cents achieved for the past two consecutive quarters of 4Q 2006 and 1Q 2007. On an annualised basis, the latest distribution represents a yield of 4.81%.1
Compared to 2Q 2006, gross revenue rose 5.5% to S$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, Japan, were also booked for the first time. Net property income was higher at S$17.9 million, despitehigher year-on-year expenses mainly attributed to higher commission paid for new and renewal leases, increased tenancy costs arising from re-positioning of tenant mix, and continued depreciation charges on the escalators that were installed at Wisma Atria’s basement in end 2006.
NAV per unit was S$1.27 as at 30 June 2007, an increase of 9.5% from NAV per unit of S$1.16 as at 31 March 2007. The valuation of MMP REIT’s two prime Orchard Road properties increased by 7.3% from S$1.498 billion in December 2006 to S$1.608 billion as at 30 June 2007, resulting in a revaluation surplus of S$110 million.
Mr Franklin Heng, Chief Executive Officer of Macquarie Pacific Star, said, “Since listing in September 2005, MMP REIT has consistently outperformed IPO projections. For each of the past two quarters, we have paid out record DPU of 1.47 cents. We are pleased to continue to deliver increased returns to unitholders in 2Q 2007 with the DPU of 1.50 cents, a 4.2% increase from DPU of 1.44 cents in 2Q 2006. Total returns for unitholders who have held MMP REIT units since its listing stand at 38.1%.
“In the second quarter of 2007 occupancy for both our retail and office portfolio in Singapore remained high with higher turnover rent contributions from retail tenants during the start of the Great Singapore Sale. In addition, 58,100 sq ft of office renewals and new leases, contracted at an average 60% increase over previous rents, came into effect during the first half of 2007. Asset enhancement at Level 2 in Wisma Atria is now complete, offering shoppers better circulation and an enhanced shopping experience. On an annualised basis, we will achieve a 43% increase in gross revenue from the reconfigured space.”
Portfolio growth strategies
Commenting on organic growth prospects for MMP REIT’s Singapore portfolio, Mr Heng said, “We have started pre-marketing of some 16,781 sq ft of retail space at Level 5 of Ngee Ann City, which will be vacated by the National Library in end February 2008. The average monthly rent of this lease is below prevailing market rates. The space will be reconfigured with a compelling retail concept embracing fashion, beauty and wellness, complementing the existing offering at Ngee Ann City. We are very encouraged by the response from retailers thus far.
“Contributions from the six newly acquired properties in Tokyo commenced in the beginning of June. We expect to deliver greater value to unitholders when income from these properties is fully recognised in the subsequent months.
“Moody’s Investor Service’s affirmation of the Baa1 rating for MMP REIT in May 2007 reiterates the high quality of MMP REIT’s portfolio, which we are building up with acquisitions in the region. The positive rating endorses our proactive asset management and multipronged investment strategy.”
Mr Heng added, “Going forward, we will continue to actively source for more assets in our key target markets, with a view to further diversify MMP REIT’s asset base and earnings stream geographically.”
1 Based on last traded unit price of S$1.25 on 26 July 2007
Source : SGX
AscottREIT – BT
Ascott trust’s income surges 58% in Q2
S’pore and Vietnam operations, strong revenue from new properties boost income to $12.1m
ASCOTT Residence Trust (ART) yesterday said that distributable income for the second quarter ended June 30, 2007, rose 58 per cent to $12.1 million, boosted by its operations in Singapore and Vietnam as well as revenue from new properties. Distributable income for the same three months in 2006 was $7.7 million. Distribution per unit (DPU) increased by 18 per cent to 2.01 cents, from 1.70 cents in 2006.
For the first six months of 2007, ART recorded distributable income of $20.2 million while DPU came to 3.60 cents. There is no comparable data for the first half of 2006 as the trust was listed only in mid-January last year.
ART’s portfolio now consists of some 2,900 serviced residence units in 18 properties across seven countries.
The trust’s strong second quarter showing was underpinned by strong revenue growth. Revenue for the three months rose 55 per cent to $40.6 million, mainly due to contributions from six new properties acquired over the past year.
Existing properties also performed well. Overall revenue per available unit (Revpau) increased by 7 per cent to $132 in the second quarter, said ART.
‘In particular, our Singapore and Vietnam properties achieved the strongest performance, with double-digit growth in revenue and gross profit,’ said Chong Kee Hiong, chief executive of the trust’s manager Ascott Residence Trust Management Limited (ARTML).
ART is aiming to grow its portfolio to $2 billion by end-2008, from $1.2 billion now, and is keen to buy properties in China, South Korea, Japan, Vietnam and Australia, Mr Chong said. The trust is expanding in line with parent company The Ascott Group, which wants to increase the number of units it manages to 25,000 by 2010 from more than 19,000 now.
The trust has targeted $500 million worth of assets across Asia now owned by Ascott for acquisition by end-2008, Mr Chong said. If it manages to pick up all the identified assets, ART will be able to add some 12 properties and 1,900 units to its portfolio. In Singapore, ART hopes to buy Ascott Singapore Raffles Place.
ART is upbeat about the rest of the year. ‘The business and market sentiments in Asia remain positive and will continue to attract foreign direct investments from multinational companies, which will bring more business travellers to the region,’ the trust said in a filing to the Singapore Exchange. ‘This will spur demand and drive Revpau growth for the Group’s serviced residences.’
Said Mr Chong: ‘ART is on track to deliver the forecast annualised DPU of 7.27 cents for the full year.’
ART’s shares closed unchanged at $2.00 yesterday.
CRCT – BT
Q2 distributable income of CRCT beats forecasts
At $8.1m, it is 9.6% more than forecast; net property income lower than expected
CAPITARETAIL China Trust (CRCT) yesterday reported a distributable income of $8.1 million for the second quarter ended June30, 2007 – 9.6 per cent higher than the forecast $7.4 million. Distribution per unit (DPU) came to 1.70 cents, which was also 9.6 per cent higher than the forecast DPU of 1.55 cents. There is no data for the corresponding three months last year as CRCT was listed in December 2006.
The trust has a portfolio of seven retail malls in China valued at about $690 million.
CRCT’s distributable income beat forecasts despite a lower-than-expected net property income and revenue. Net property income for the second quarter came in at $12.4 million, 1.6 per cent lower than the forecast of $12.6 million. Similarly, gross revenue was $17.9 million, 7.2 per cent less than the forecast $19.2 million.
CRCT attributed the lower-than-expected turnover to a temporary vacancy void due to reconfiguration works at Xinwu Mall, as well as the longer-than-expected time taken to conclude lease negotiations with F&B tenants at Qibao Mall.
Revenue at Wangjing Mall was also lower due to some tenants taking longer than anticipated to receive their approvals from the authorities as well as pre-terminations by some tenants, CRCT said. The situation at Wangjing Mall has already been resolved, said Lim Beng Chee, chief executive of CapitaRetail China Trust Management Limited (CRCTML), CRCT’s manager. Xinwu Mall will be at peak performance soon. For Qibao Mall, performance will be normal by year-end, Mr Lim said.
The trust will continue to look for opportunities to grow its portfolio size in 2007, and remains confident of delivering the forecast distribution of 6.13 cents per unit for the year – barring any unforeseen circumstances.
‘CRCT is on track to undertake, in the next few months, its first yield accretive acquisition worth over $250 million, which will grow its asset size to close to $1 billion,’ said Hsuan Owyang, chairman of CRCTML.
The new acquisitions are likely to come from its parent company CapitaLand’s properties in China, Mr Lim added.
CRCT’s shares gained one cent to close at $2.75 yesterday.
a-iTrust : UOBKH
Singapore’s First Listed Indian Property Trust
a-iTrust, Singapore’s First Listed Indian Property Trust has launched its IPO on 25th July 2007 with an initial yield of 4.75%. The initial portfolio comprises of four industrial assets in India, with a total portfolio size of S$932.5m.
Strategic assets with quality tenants. A-iTrust’s four world class IT parks, namely International Tech Park Bangalore (ITPB), International Tech Park Chennai (ITPC), CyberPearl (Hyderabad) and The V (Hyderabad) comprise of 13 predominantly multi-tenanted buildings. The properties occupy a total Super Built-up area (SBA) of 4.25m sf and have an overall portfolio occupancy of 95%. The properties are supported by a host of ancillary facilities and facilities with a significant portion of their tenants comprising of leading MNCs.
Characteristics of a REIT, but not one. a-iTrust is a business trust and not a REIT, but will however take after characteristics of a REIT. Management has committed to distribute 100% (min 90% for REIT) of distributable income from listing date to FY09, and at least 90% thereafter, as well as voluntarily limit its gearing to 35% of deposited property or 60% if credit rating is obtained (similar to a REIT). As a business trust, it can however take on a maximum of 20% property development activities of the trust property, unlike a REIT, whose development activities are capped at 10%.
Unique growth model. The trust adopts a unique growth model comprising of organic growth, an in-built development pipeline on existing land within its property portfolio, and the Trustee-Manager’s three-pronged external acquisition strategy. Its acquisition strategy includes: 1) Right of First Refusal (ROFR) of properties in India from Ascendas India Development Trust (AIDT); 2) ROFR of properties in India from Sponsor; and 3) third-party acquisitions.
On its in-built development pipeline, the completion of the second building in ITPC, the Crest (due completion in Aug 07), as well as the completion of the fifth building in The V (due completion in Sep 07), will see an addition of 0.73m sf and 0.38m sf of SBA respectively. Over the next three years, we will also see an increase in SBA by 5.3m sf through the development of several other buildings.