Author: tfwee
LMIR – BT
LMIR Trust income dips despite stable rents
It cites depreciation of rupiah, drop in casual leasing and other income
LIPPO-MAPLETREE Indonesia Retail Trust (LMIR Trust) yesterday reported a 12.5 per cent year-on-year drop in distributable income to $13.9 million, for its second quarter.
Distribution per unit also fell to 1.3 cents for the quarter ended June 30, from 1.5 cents for last year’s Q2.
Gross revenue fell 20.3 per cent to $19.5 million. Reasons include the depreciation of the Indonesian rupiah, reduced casual leasing income, and lower car park and miscellaneous income as retailers cut back on publicity expenses such as signage fees, the trust’s manager said.
Property expenses dropped 14.3 per cent to $1.1 million.
Net property income fell 20.6 per cent to $18.5 million from $23.3 million one year back.
LMIR Trust’s property portfolio currently consists of eight retail malls and seven retail spaces located within other retail malls, all in Indonesia.
Its portfolio occupancy rate held steady at 95 per cent in the second quarter, ‘significantly better than the industry average’, the trust’s manager said.
In Q2, average monthly gross rents remained stable in Jakarta, where most of LMIR Trust’s portfolio properties are situated.
Some new properties, now under construction and expected to come onto the market in the coming year, could keep rental rates soft for the rest of this year, but will most likely affect the upper category of retail malls.
LMIR Trust’s management said that ‘the middle target market for its malls and their choice locations will allow its portfolio to be resilient, particularly in light of Indonesia’s economic outlook’.
Its gearing as at June 30 was 12.1 per cent, with total borrowings of $125 million for a tenure of four years from March 31.
LMIR Trust’s unit price closed one cent up, at 44 cents yesterday.
Suntec – CIMB
Suntec REIT’s 2Q09 results exceeded both the Street and our expectations on a stronger topline, better net property income margins, and lower interest expense. Distributable income of S$47.7m (+14% yoy) and DPU of 2.98cts (+7% yoy) form 32% of our full-year forecasts. 1H09 DPU of 5.9cts also exceeded expectations at 64% of our full-year forecast. Office occupancy declined 2.6% pts to 94.8% while retail occupancy was stable at 98.4%. In view of the strong 1H, we have moderated our rental decline assumptions and assumed higher net property income margins. Our DPU forecasts for FY09-11 rise by 8-20%. Our target price rises accordingly to S$1.28 from S$1.07 (discount rate 9.4%), still based on DDM valuation. Maintain Outperform.
Suntec – DBS
No surprises
• Results in line
• Office rents still tracking downwards but at slower pace
• Buy with TP of $1.18
2Q09 DPU at 2.98cts. Suntec reported a set of in line results with revenue rising 9% yoy to $64.5m but marginally down qoq. NPI remained relatively flat qoq at $48.8m while distributable income came in 2.8% higher to $47.7m. Annualised yield works out to be 11.2%. No revaluation was done for the quarter.
Office – more of the same. As expected, average office renewal rents dipped to $8.24psf/mth vs $9.90psf/mth in Q1 but still resulted in positive rental reversions. Office portfolio occupancy dipped to 95% in Q2 and is expected to stabilize at this level for the rest of this year. The retail component remained relatively flat. Looking ahead, office rents is expected to continue to dip, but at a smaller pace. Current asking rents is still at about $8psf.mth. The group has a remaining 4.5% of NLA to be renewed in FY09 and another 26% in FY10. To improve connectivity from the upcoming opening of the Circle Line station at Suntec Mall, some minor enhancement works are planned over the next few months but capex should remain small.
Maintain Buy. Suntec’s valuations are undemanding at FY09 and FY10 DPU yield of 10.1% and 8.3% and P/bk NAV of 0.53x. Suntec’s balance sheet is healthy at 33.9% gearing and no refinancing needs till 2011. Maintain Buy with revised TP of $1.18.
a-iTrust – BT
Ascendas India Trust’s Q1 DPU rises 25%
ASCENDAS India Trust (A-iTrust) is making a distribution per unit (DPU) of 2.06 cents for its first financial quarter ended June 30, 2009, up 25 per cent from the same quarter last year, said Ascendas Property Fund Trustee Pte Ltd, the trustee-manager of the Reit.
Cash generation remains strong, with distributable income at at $15.7 million for the latest quarter, registering a growth of 26 per cent from a year ago, it said.
Total property income for the quarter was $29.7 million, an increase of 4 per cent, while net property income was $18.3 million or 15 per cent higher.
The DPU of 2.06 cents for Q1 2009 represents an annualised yield of 12 per cent and 9.8 per cent respectively over the closing prices of $0.69 and $0.84 per unit on June 30 and July 29, 2009.
Gearing remained low at 9 per cent as at June 30, 2009.
‘The strong cash generation this quarter was made possible by the steady demand for space in our properties, as demonstrated by continued high portfolio occupancy of 97 per cent as at 30 June 2009,’ said Jonathan Yap, chief executive officer of the trustee-manager.
A-iTrust’s portfolio of 4.8 million sq ft of completed space is fairly evenly distributed among Bangalore, Chennai and Hyderabad.
The properties house 246 tenants operating in IT sub-sectors such as software development, business process off-shoring, research and development, and data centres.
Occupancy rate for the portfolio was 97 per cent as at June 30, 2009. During the quarter, only about 2 per cent of the portfolio’s leases expired, out of which half has been successfully renewed. About 10 per cent of space is due for renewal in the current financial year.
The Reit said that it aims to renew or replace expiring leases in advance. The strategy is to seek a balance between maximising lease renewals so as to lower leasing costs and enhancing tenancy quality and diversification by introducing new tenants.